Avocado pricing has fallen well below Credit Suisse forecasts, to $14.87 per 10kg tray. The broker was expecting the possibility of under $20/tray, given a large crop in Western Australia, but this breaks the charts. Therefore production assumptions are lowered.
Pricing in 2021 has no bearing on the following years, in the broker’s view, so there are no changes to future forecasts and prices are expected to recover.
Outperform rating and $4.15 target are unchanged.
Sector: Food, Beverage & Tobacco.
Target price is $4.15.Current Price is $3.22. Difference: $0.93 – (brackets indicate current price is over target). If CGC meets the Credit Suisse target it will return approximately 22% (excluding dividends, fees and charges – negative figures indicate an expected loss).
