Mission Produce is positioned for long-term upside ahead of its fiscal third-quarter results, according to an analysis by Insider Monkey. The company, which derives about 85% of revenue from avocados, saw sales fall 20% in the first half as avocado prices collapsed due to a supply glut from Mexico, but prices are now expected to recover amid drought stress in Michoacán and a seasonal shift toward Mission's own Peruvian harvest. Management expects fiscal Q3 pricing to decline about 15% year over year, compared with 30% and 36% declines in the prior two quarters, and has guided to adjusted EBITDA of $84 million to $88 million for the second half. The recent $465 million acquisition of Calavo Growers adds two Mexican packhouses and higher-margin prepared foods, while insiders including directors and the largest shareholder have been buying shares. At 11.9 times forward EV/EBITDA, the analysis values the stock at about $16.50 per share, roughly 29% above current levels.
Mission Produce IncAvocado prices expected to recover due to drought stress in Michoacán and shift to Peruvian harvest, improving pricing.
Calavo Growers IncAcquired by Mission Produce at $465 million, providing value to shareholders.
