Bunge Global S.A. BG

Key data

The business

Bunge is one of a handful of global agribusinesses, alongside ADM, Cargill and Louis Dreyfus, that stand between the farmer and the food company. It buys oilseeds and grain at origin, crushes soybeans into protein meal for animal feed and oil for food and biofuel, and moves the rest through ports and plants worldwide. The money is made on spread and volume, not brand: a few dollars a ton, times enormous tonnage. In mid-2025 it closed its merger with Viterra, a grain handler and trader, roughly doubling revenue and reach and turning Bunge into a genuine rival to Cargill in scale. The moat is cost and network: origination assets, crush capacity and logistics a newcomer cannot replicate. The customer never sees Bunge; they see the meal in the trough and the oil in the fryer.

The numbers

Two things happened at once: the Viterra merger roughly doubled quarterly revenue starting in the third quarter of 2025, and gross margin on all that volume kept compressing.

Reported profit fell every quarter through Q1 2026 even as revenue held above $20B. Q2 2026, reported July 29, broke the streak with adjusted earnings of $2.00 a share edging the $1.97 penciled in, a seasonal harvest snapback plus firmer processing.

Step back and the cycle is plain: Bunge earned $13 to $15 a share in its good years and just $4.91 in 2025. The reason sits in one line, the slice it keeps.

Gross margin more than halved to a cycle low. That is the crush spread, the gap between what a soybean costs and what its meal and oil fetch, showing through the whole P&L. On roughly 192M shares now outstanding, consensus carries about $9.52 this year and $11.17 next, near 12x at today's price. The market has priced the cycle bottom to persist. My read: the recovery is not yet in the number, and the print that settles it is gross margin turning back up toward 6%.

Management

The record here is better than the earnings. In late July and early August, right after the Q2 print, director Christopher Mahoney bought about $689,000 of stock in two open-market purchases; plan status not disclosed. Against that, officer Julio Garros sold about $337,000 in February; plan status not disclosed. Net, insiders put money in at these prices. Capital return narrowed sensibly, buybacks falling to $551M in 2025 from $1.1B, as the balance sheet absorbed the deal. The crush-spread guidance has not been revisited in the weeks since; the one real move was terming out merger debt through a senior-notes issue in mid-August, which fixes the balance-sheet leg, not the margin one. Long-term debt has roughly doubled to $11.3B, and that is the number to watch.

How it fails or surprises you

Crush stays compressed. Gross margin hit 3.5% in Q1 2026, the low of this cycle. If it holds under 4% through 2026, the ≈$9.52 in expected earnings does not arrive and this is a levered processor waiting on weather, not a re-rating. The print: quarterly gross margin.

The debt leg (the fact the read explains least). Net debt runs about 6.5x depressed EBITDA, operating cash flow was just $844M in 2025, and free cash flow is negative with capex climbing to $1.7B. Terming out the notes bought time, not cash. If EBITDA does not recover, coverage tightens fast. The print: operating cash flow turning positive.

Biofuel demand pulls the spread wide (right tail). Rising US renewable-diesel and blend mandates lift demand for soybean oil, the exact product Bunge crushes, just as Viterra synergies land. Crush margins re-expand, earnings run toward the $11+ that 2027 consensus already sketches, and 12x becomes cheap. Not paid for today. The print: gross margin re-expanding toward 6%.

Closing thoughts

Whether gross margin and cash flow turn up in the next two quarters decides it. Bunge is a cyclical sitting at cycle-low margins: cheap on normalized earnings, dear on last year's GAAP, freshly levered from a deal it is still digesting. An ambiguous read, margin flat around 4%, means you wait and watch the debt rather than add. The fatter tail is modestly to the upside from here, because the downside is largely known and the insiders just bought, but the honest risk is the balance sheet: if margins stay at the bottom, $11.3B of debt against thin cash flow is what hurts you, and that outweighs a good harvest.

The bet is still that Bunge keeps more from each bushel than it did last year, when its margin shrank to almost nothing, and that the Viterra deal it just swallowed was worth doing. It breaks if the spread stays compressed: watch gross margin and operating cash flow together, because a margin recovery that does not turn cash flow positive is not a recovery. Below 4% margin and negative cash into 2027, and this is a processor waiting for the next cycle, not compounding through this one.