INITIATING COVERAGE

Bunge Global SA

NYSE: BG

2026-05-26

Current Price: $120.71 | Conviction: High

Post-Viterra ABCD #2 — synergies ahead of plan, biofuel demand pull on soy oil, LatAm origination scale.

Executive Summary

We initiate coverage of Bunge Global SA (NYSE: BG) with a BUY rating and a 12-month target price of $166.50, implying +37.9% upside from a current price of $120.71. Bunge is the post-Viterra #2 ABCD agribusiness globally (behind private Cargill, ahead of ADM in grain/oilseed scope) with a >$100B revenue run-rate, the most globally diversified ABCD geographic footprint, and a direct structural beneficiary of the EPA RFS 2026/27 final rule (renewable-diesel demand for soybean oil at 4.86B gal/yr — vs. ~zero absent the mandate).

Our target derives mechanically from a probability-weighted FCFF DCF (50% Base / 25% Bull / 25% Bear) with symmetric ±125bps WACC scenarios per pipeline methodology. WACC of 6.69% combines a directly-derived CAPM cost of equity (Ke = 8.18% from Rf 4.40% + Beta 0.63 × ERP 5.50% + CRP 0.50% for LatAm/EM weight) with a 4.54% after-tax cost of debt at the current ~59/41 equity/debt mix. Terminal value blends perpetuity-growth (2.5%) and exit-multiple (9.0x EV/EBITDA, mid-cycle sector median) methods. The Base case fair value is $153.44; the weighted target rounds to $166.50.

Key call-outs

• Bunge–Viterra integration is ahead of plan: $190M of synergies realized in FY 2026, on track for the $250M run-rate target by 2027. Management has raised 2026 adj. EPS guidance twice this year (initial $7.50–8.00 → $9.00–9.50).
• BG sits at the intersection of three structural tailwinds: (1) renewable-diesel demand pull on US soybean oil (RFS 2026/27 finalized 27-Mar-2026 at +60% above 2025), (2) Latin American export dominance (Brazil 42.2% of world soy output), and (3) EUDR-driven incumbent advantage (compliance deadline 30-Dec-2026 squeezes smaller traders).
• Valuation: BG trades at 12.6x trailing EV/EBITDA (vs. 7.7x 10-yr historical median) — 64% above mid-cycle, but supported by trough TTM EBITDA distortion (denominator effect) and Viterra synergy ramp. On FY26E EBITDA of $3.5–3.6B, the multiple compresses to a more reasonable 11x, in line with comps.
• Brazil 2025/26 record soybean crop (180+ MMT, 42% of world output) is a near-term sentiment headwind on commodity prices; offset by US crush spread strength and Viterra-driven scale.
• Catalysts to monitor: Q2 2026 earnings (early-Aug), EPA RFS implementation, US-China soybean trade purchases (currently lagging at 42% of pledged 25 MMT/yr), and Argentine 2026/27 soy outlook (El Niño potential lifts Argentine yield).

Investment Thesis

Our BUY thesis rests on five pillars.

Pillar 1 — Viterra synergy ramp is accelerating (asymmetric upside vs. plan)

The Bunge–Viterra merger closed 2-July-2025. Management originally targeted $250M of run-rate synergies by Year-3 (2028); Year-1 (FY 2026) actual is $190M realized — already 76% of the run-rate target. Management has track record of beating Viterra synergy guides since announcement (Glencore had embedded $230M synergies in 2023; Bunge initial $250M; current trajectory implies $300–350M is achievable).

Synergies flow through procurement, logistics optimization, freight network rationalization, and cross-selling of softseed products (Viterra's Canadian canola/sunflower) into Bunge's downstream refining and specialty oils. Each $100M of synergies adds ~$0.40 to adj. EPS at a 21% tax rate.

Pillar 2 — Renewable-diesel demand pull on soybean oil (structural)

The 27-March-2026 EPA RFS final rule set biomass-based diesel at 8.86B gal in 2026 and 8.95B gal in 2027 — a 60% increase versus 2025. EPA modelling implies soybean-oil and canola-oil renewable diesel reaches 4.86B gal/yr — without the mandate the level would be near zero. The structural read-through: a permanent demand floor under US soybean oil, which now captures 40–45% of crush-spread value vs. the 30–35% historical norm.

Bunge's US crush footprint benefits directly. US 2025/26 crush is forecast at a record 2.55–2.57B bushels with 12 new plants + 5 expansions pipelined to add 1.46M bu/day. Bunge owns 8 of the top 25 US soybean crush facilities and has announced expansions at Decatur, IN (+20%) and Council Bluffs, IA (+15%) by 2027.

Pillar 3 — Most diversified ABCD geographic footprint post-Viterra

Pre-merger, Bunge was the LatAm leader with deep origination in Brazil (Mato Grosso, Parana) and Argentina (Rosario complex). Viterra brings Canadian prairie origination (#1 Canadian softseed), Australian East Coast wheat/canola, and Eastern European grain assets. The combined footprint is the most geographically diversified within the ABCD universe — ADM tilts US, Wilmar tilts Asia, Louis Dreyfus is diversified but smaller-scale.

Geographic diversification matters because the soy/grain trade is fundamentally a regional arbitrage business. When Brazil floods the market (as in 2025/26 with the 180+ MMT crop), Bunge can pivot to Canadian softseed margins; when Argentina is constrained by FX/export tax regime, Australian and Canadian wheat fill the gap.

Pillar 4 — EUDR creates incumbent moat (catalyst near-term)

The EU Deforestation Regulation enforcement deadline is 30-Dec-2026 for large operators. It requires geolocation of every plot for soy, palm, cattle, coffee, cocoa, rubber, wood. The EU is the #2 US soy market with ~$5.6B exports (44% of US ag to EU). Bunge has invested heavily in traceability infrastructure since 2022 — over 80% of Bunge's Latin American soy supply is now geolocated. Smaller traders and farmer co-ops cannot replicate this in time.

Implication: EUDR effectively squeezes smaller competitors out of the EU export pool, creating a moat for integrated incumbents (BG, ADM, Cargill, Wilmar). Estimate 50–150 bps of structural margin uplift for compliant ABCD over 2027–2029.

Pillar 5 — Valuation framework supports +20–35% upside

Our DCF Base case ($153.44) implies +27% upside on standalone basis at WACC 6.69% and EV/EBITDA exit of 9x. The 50/25/25 weighted target ($166.50) implies +38% upside. Both are above consensus PT range of $135–136. Consensus appears to under-discount the Viterra synergy upside and the EUDR moat development.

Cross-check: blended comps-implied price is $125.34 (+4% upside, in line with current trading) — but comps weight trough TTM EBITDA heavily, which distorts. Forward EV/EBITDA of 11x on $3.5B FY26E EBITDA implies fair value of ~$140, between comps and DCF. We weight DCF more heavily for forward visibility on Viterra synergies.

Company Overview

Bunge Global SA is an integrated agribusiness and food company, founded in 1818 in Amsterdam, redomiciled in Switzerland (Geneva) since 2023, and listed on NYSE. Following the 2-July-2025 merger with Viterra, Bunge is the world's #2 grain/oilseed trader and processor by scale (behind privately-held Cargill, ahead of public peer ADM). The combined company has 50,000+ employees across 70+ countries with 300+ grain storage facilities, 40+ port terminals and 155+ processing/refining facilities.

Business segments (post-Q1 2026 reorganization)

Source: BG Q1 2026 10-Q segment reorganization disclosure.

Key operating metrics

Management

• Greg Heckman — CEO (since 2019). Led Viterra acquisition and integration. Previously CEO Gavilon (acquired by Marubeni 2013).
• John Neppl — CFO (since 2019). Long-time Bunge finance executive.
• David Kabbes — Chief Sustainability & Procurement Officer; leading EUDR compliance build-out.

Sector Analysis (Summary)

The global agribusiness / oilseed processing / grain trading sector is a $1T+ traded-value pool growing 4.7% CAGR through 2030. The ABCD oligopoly (ADM, Bunge, Cargill, Louis Dreyfus) plus Wilmar and COFCO control 70–90% of global bulk grain and oilseed flows. The sector is structurally concentrated, capital-intensive (5–10B asset bases + 10–20B working capital), and cyclical (crush spreads, FX, weather). Through-cycle ROIC is 5–9%.

Bunge's post-Viterra positioning places it at the intersection of: (a) the cleanest M&A integration catalyst in the sector, (b) the largest beneficiary of structural RD-driven soybean-oil demand pull, and (c) the most geographically diversified ABCD footprint. See Sector Overview document for full TAM/SAM, S&D dynamics, competitive landscape, and disruptive threats.

Sector tailwinds — quick reference

• Renewable diesel / SAF: EPA RFS 2026/27 sets BBD at 8.86–8.95B gal/yr (+60% vs. 2025); soy-oil renewable diesel reaches 4.86B gal/yr.
• Latin American dominance: Brazil 42.2% of world soy output; 74–80% of Brazilian soy → China.
• Asian protein demand: China imports 105+ MMT soy/yr; India edible-oil imports 7–8 MMT/yr.
• EUDR moat: 30-Dec-2026 compliance deadline; favors integrated ABCD with traceability.

Financial Analysis

Historical performance (2022A–2025A)

Note: 2025A includes only H2 Viterra (merger closed Jul-2025); revenue jump reflects acquisition not organic growth.

Forecast (2026E–2030E)

* 2026E growth reflects first full Viterra year. ** Adj. EPS adds back Viterra integration costs and intangible amortization. See 04-financial-model/3-statements.xlsx for full detail.

Valuation

Methodology

We use a probability-weighted FCFF DCF as our primary valuation methodology, appropriate for an industrial commodity processor where debt represents genuine third-party financing (not balance-sheet inventory funding). The model uses WACC discounting with symmetric ±125bps WACC scenarios for Bull/Bear per pipeline methodology. Comps serve as cross-check.

WACC build (CAPM, direct — no quality premium)

DCF scenario summary

Comps cross-check

Blended comps-implied price using weighted multiples (EV/EBITDA FY26E primary, P/E FY26E secondary, P/B tertiary): $125.34 (+3.8% upside, in line with current). Comps weight depressed TTM EBITDA heavily and don't yet capture the Viterra full-year. Forward EV/EBITDA of 11x × FY26E EBITDA $3.5B − net debt $14.59B = ~$140 implied price (+16% upside).

We weight DCF (75%) more heavily than comps (25%) because: (a) forward visibility on Viterra synergies is clear, (b) industry multiples are distorted by trough TTM, and (c) the EUDR moat is not yet reflected in peer multiples.

Competitive Landscape

The ABCD oligopoly + Wilmar control 70–90% of global grain/oilseed trade. Post-Viterra, Bunge ranks #2 by scale behind privately-held Cargill, ahead of ADM in grain/oilseed scope.

Disruptive Threat Assessment

Per pipeline methodology, every disruptive technology and emerging competitor is evaluated explicitly: scale today, position on the S-curve, why material or not, and trigger events that would change the assessment.

Threat 1 — Decarbonization & scope-3 customer pressure (MATERIAL, slow burn)

• Scale today: Nestlé, Unilever, Danone, Mondelez and other CPG buyers pressing suppliers for verified scope-3 reductions; ABCD has launched 1–3M-acre regenerative-ag programs.
• Why material: scale incumbents will pass cost through; smaller traders struggle. Estimated 50–100 bps of EBIT margin drag from capex + opex over 5–10 years.
• Trigger event: a major CPG buyer (e.g., Nestlé, Unilever) sets a verified deforestation-free purchase commitment with 2030 deadline tied to volume contracts.
• Bunge position: leading EUDR-aligned investment; advantage relative to smaller competitors.

Threat 2 — EUDR enforcement (MATERIAL, near-term catalyst)

• Scale today: 30-Dec-2026 enforcement deadline for large operators; covers soy, palm, cattle, coffee, cocoa, rubber, wood.
• Why material: EU is #2 US soy market with $5.6B exports at stake; geolocation requirement squeezes smaller traders.
• Trigger event: enforcement tightens (further moat for BG/ADM) or slips materially (delays moat but reduces compliance cost).
• Bunge position: 80%+ of LatAm soy supply geolocated; positioned as compliance-ready incumbent.

Threat 3 — Geopolitics & trade policy (MATERIAL, recurring)

• Scale today: China share of US soy imports dropped from 21% (2024) to 15% (2025) after 13% tariff. Nov-2025 US-China deal pledged 25 MMT/yr through 2028; only 10.6 MMT actually booked through Feb-2026 (42% of pace).
• Why material: any tariff escalation immediately reroutes flows and compresses crush spreads.
• Trigger event: US-China commitment falls below 50% fulfillment; or new tariff escalation.
• Bunge position: most diversified ABCD footprint means lower single-corridor risk than pure US peer ADM.

Threat 4 — Weather / ENSO cycle (MATERIAL, recurring)

• Scale today: La Niña fading early 2026; El Niño potential window May–Jul 2026 per NOAA.
• Why material: Argentine soy yield swings 25–30% between El Niño-friendly and La Niña-damaged years.
• Trigger event: NOAA shifts ENSO outlook to confirmed El Niño with >70% probability.
• Bunge position: diversified across hemispheres softens any single-region weather shock.

Threat 5 — Synthetic biology / precision fermentation (IMMATERIAL near-term, not dismissed)

• Scale today: bovine-protein precision fermentation $210–310/kg vs. conventional $15–25/kg; projected 5× cheaper by 2030, 10× by 2035.
• Why immaterial near-term: even aggressive scenarios displace <5% of soy meal demand by 2035; microbial protein still requires sustained <$5/kg with FDA/EU acceptance to compete in animal feed.
• Trigger event: precision-fermentation plant achieves verified <$5/kg microbial protein with feed-grade regulatory acceptance.
• Why not dismissed: at scale, this technology could disrupt the largest commodity demand pool (animal feed protein). ABCD pre-empts via ingredient acquisitions and soy protein concentrate operations.

Threat 6 — Direct farmer-to-consumer platforms (IMMATERIAL for global trade)

• Scale today: works in niche/local food only. Does not address the $400B+ global oilseed/grain trade flows that require shipping, port handling, industrial-scale storage.
• Why immaterial: physics of bulk-commodity logistics make disintermediation impractical.
• Trigger event: a major digital marketplace achieves >5% share of US/Brazil bulk grain origination — currently <1%.

Risks

Key downside risks to thesis

• Brazil 2025/26 record crop + 2026/27 even larger → multi-year global glut. Soybean futures could compress further; crush margins follow.
• US-China soybean trade fragility — pledged 25 MMT/yr only 42% executed; further deterioration would reduce US export volumes.
• Viterra integration risk — culture clash, IT system harmonization, $9.8B debt servicing. Synergy delivery could slip; goodwill impairment if guidance is missed.
• South American crush margin compression — Brazil utilization down with record exports; Argentine processor profitability lowest in nearly two decades.
• Diamond Green Diesel-style RD margin collapse — DAR Q4 25 EBITDA $0.21/gal vs. $1+ historical. If spreads to feedstock (soy oil) values, BG/ADM crush spreads compress.
• Technology disruption — see Section 8 Disruptive Threat Assessment for full evaluation.

Other risks

• FX volatility — BRL, ARS exposure; weak peso can compress earnings via translation
• Commodity price volatility — soy/corn/wheat futures move daily; risk management functions are sophisticated but not perfect
• Regulatory change — EUDR, Cerrado moratorium, NCG 461 implementation could increase compliance cost
• Insurance / catastrophe risk — port terminals and crush facilities are large physical assets exposed to fire, weather, geopolitical disruption

Catalysts

Conclusion

We initiate coverage of Bunge Global SA with a BUY rating and a 12-month target price of $166.50 (+37.9% upside). The thesis combines (i) accelerating Viterra synergy delivery, (ii) structural renewable-diesel demand pull on soybean oil, (iii) the most diversified ABCD geographic footprint, (iv) EUDR-driven incumbent moat, and (v) a DCF-anchored valuation framework that supports +27% upside on standalone basis. Conviction is HIGH; we will track thesis pillars and disruptive threats through the Thesis Tracker and Catalyst Calendar.

DISCLAIMER: For institutional / educational use only. Not investment advice. Data as of May 2026. Sources: company 10-K/10-Q (BG, ADM, WLMR), USDA WASDE & FAS, EPA RFS final rule, Damodaran ERP, FRED (RF), Yahoo Finance (Beta, prices), S&P Global, DTN, Reuters, NOAA / Drought.gov. Figures subject to change with quarterly updates.