GrainCorp (ASX:GNC) shares dropped 11% on Thursday, which was too "harsh" for its fiscal year 2025 results, according to a Thursday Jefferies note.

The company on Thursday reported fiscal 2025 earnings of AU$0.18 per share, down from AU$0.275 a year earlier. Revenue for the 12 months ended Sept. 30 was AU$7.31 billion, compared with AU$6.51 billion a year earlier.

The investment firm said the sell-off was harsh because the company's through-the-cycle earnings outlook is unchanged.

Jefferies said that the delay in the Transform Program and the write-off of Grains Connect were disappointing but are considered minor issues in the broader context.

Jefferies notes that GrainCorp's earnings are steady, but stronger margins depend on an end to the current streak of record global grain production, as the investment firm believes that a supply disruption in Europe, North America, or Asia is inevitable at some point. Until then, GrainCorp's margins are expected to remain subdued.

Jefferies has maintained its hold rating on GrainCorp and lowered its price target to AU$9.30 from AU$9.70.