Costa group stock jumps 5.3%
The big lift in the price target comes after the broker took a deeper dive into the company’s recent acquisition of Avocado Ridge in partnership with Macquarie Agricultural Funds Management, and raised its outlook for the company’s blackberries business. Here’s Goldman’s view on the prospects for the avocados and blackberries business:
"The avocado market has experienced robust growth over the past decade. We expect steady volume and value growth driven by increased consumption and potential expansion into the export markets over the medium term. Consistent with CGC’s stated strategy, the company could make further avocado farm acquisitions to help achieve its goal of being the largest player in the market, in our view. For Blackberries, we have added significant capacity to our longterm forecasts. CGC has stated that the new varietals from Driscoll’s could see the Australian blackberry market rival raspberries in size. We forecast CGC to have c.170Ha planted by 2021E vs c200Ha of raspberry capacity."
Goldman reiterated its buy rating and raised its price target to AUD5.10 a share from AUD4 a share. Costa Group was last trading at AUD4.61 a share.
source: blogs.barrons.com
