REA Holdings still a 'speculative buy', says Canaccord Genuity

(Sharecast News) - Canaccord Genuity has reiterated a 'speculative buy' rating on palm oil producer REA Holdings despite recent falls in the stock, predicting that the share price could still more than double from current levels. The shares, which have fallen 12% over the past month, including a 6% fall on Friday to 106p, have the potential to reach 260p, according to Canaccord Genuity, which said growth prospects are not currently reflected in the price.

An AGM statement from the company last week revealed broadly stable operations over the first five months of 2026, with average realised crude palm oil prices broadly in line with last year but ahead of full-year projections. This, Canaccord Genuity said, could indicate potential upside later in the year if current conditions persist.

"We make no changes to our forecasts following the update. The company continues to perform in line with expectations, supported by solid operational delivery and a favourable pricing environment. We continue to expect REA to deliver a strong FY26, with production weighted towards H2 and earnings underpinned by firm palm oil prices," Canaccord Genuity said.

The broker, however, did highlight ongoing regulatory uncertainty surrounding export policies in Indonesia, where REA cultivates oil palms in East Kalimantan, given its potential impact on realised pricing.

"Although quarry development has progressed more slowly than initially anticipated, we continue to view this segment as a key mid-term value catalyst. Combined with the group's highly cash-generative plantation operations, this underpins our view that the stock remains undervalued," Canaccord Genuity said.