Is Fresh Del Monte (FDP) Pricing In Its Strong Three Year Share Price Performance?

• Wondering if Fresh Del Monte Produce at around US$40.32 is offering good value for the risk you are taking, or if the recent optimism has already been priced in.
• The stock has returned 3.2% over the last 7 days, 9.2% over 30 days, 14.2% year to date, 38.3% over 1 year and 55.7% over 3 years, with a 5 year return of 69.9%. This naturally raises questions about what is baked into the current share price.
• Recent coverage around the company has focused on its position as a global fresh produce supplier and how it is managing costs and supply chains. This helps frame how investors are thinking about its risk and return profile. For long term holders and new investors alike, this backdrop gives useful context when weighing the recent share price performance against the fundamentals.
• On our checklist based valuation framework, Fresh Del Monte Produce currently earns a value score of 5 out of 6. Next we will look at the standard valuation methods behind that score, before finishing with a more complete way to think about what the shares might be worth.

Fresh Del Monte Produce delivered 38.3% returns over the last year. See how this stacks up to the rest of the Food industry.

Approach 1: Fresh Del Monte Produce Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model takes estimates of a company’s future cash flows, then discounts them back to today using a required return, to arrive at an estimate of what the business might be worth per share.

For Fresh Del Monte Produce, the model used is a 2 Stage Free Cash Flow to Equity approach. The company’s latest twelve month free cash flow is about $177.1 million. Based on analyst input for 2026 and further projections by Simply Wall St, free cash flow is estimated at $130.0 million in 2026, with a series of annual projections out to 2035, all remaining below $1b and therefore still in the millions range.

Bringing these projected cash flows back to today and adding a terminal value gives an estimated intrinsic value of $68.52 per share under this DCF model. Compared to a current share price of about $40.32, the DCF output implies that Fresh Del Monte Produce is around 41.2% undervalued on these assumptions.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Fresh Del Monte Produce is undervalued by 41.2%. Track this in your watchlist or portfolio, or discover 56 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Fresh Del Monte Produce.

Approach 2: Fresh Del Monte Produce Price vs Earnings

For a profitable company like Fresh Del Monte Produce, the P/E ratio is a useful way to relate what you are paying for each share to the earnings the business is currently generating. It gives you a quick sense of how the market is weighing those earnings against the risks and opportunities it sees ahead.

In general, higher expected growth and lower perceived risk can justify a higher P/E, while lower growth expectations and higher risk tend to support a lower P/E. Fresh Del Monte Produce is trading on a P/E of 24.3x, which is close to the Food industry average of about 24.3x and below the peer group average of 58.3x.

Simply Wall St’s Fair Ratio for the company is 55.7x. This is a proprietary estimate of what a more tailored P/E might look like after considering factors such as earnings growth, industry, profit margins, market cap and specific risks. Because it adjusts for these company level drivers, the Fair Ratio can be a more focused yardstick than a simple comparison to industry or peer averages.

With the current P/E of 24.3x below the Fair Ratio of 55.7x, this approach points to the shares looking undervalued on earnings.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Fresh Del Monte Produce Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, which are simple stories you create on Simply Wall St’s Community page. These link your view of Fresh Del Monte Produce’s business, such as how pineapple supply, climate risks, premium product demand or future margins might play out, to a financial forecast and fair value. You can then constantly compare that fair value to the current price and refresh it when new news or earnings arrive. One investor might build a cautious Narrative around a fair value close to the US$38.50 analyst consensus, while another might input stronger long term assumptions that align more with the US$46 fair value estimate. Both can clearly see how their story, numbers and price line up when deciding whether the stock looks appealing or not for their own portfolio.

Do you think there's more to the story for Fresh Del Monte Produce? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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