FRESH DEL MONTE PRODUCE INC (FDP): what the price requires
At today's price, FRESH DEL MONTE PRODUCE INC (FDP) is priced for -3.4% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-17 · Source: https://boothcheck.com/report/FDP
Headline
| Field | Value |
|---|---|
| Ticker | FDP |
| Company | FRESH DEL MONTE PRODUCE INC |
| Current price | $29.19/sh |
| Composition | North America 58% / Europe 21% / Asia 9% / Middle East 10% / Other 2% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 1.1% |
| Operating margin today | 2.6% |
| Margin compression implied | -1.5pp |
| Implied growth | -3.4% |
| Multiple paid | 17x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7.4pp (computed at the 7% minimum rate; the CAPM rate 5.4% sits below it).
Reconcile: at the x-ray's 9.3% required return this reads ~12.1%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.26σ |
| cohort percentile (of 76 peers) | 50 |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by earnings-power and relative-multiple value, while asset-based lands below the price. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 3.02x | 5 | expensive |
| Earnings | 1.09x | 4 | expensive |
| Relative | 1.25x | 3 | expensive |
| Growth | 1.38x | 5 | expensive |
Families that justify the price: Earnings, Relative Families that call it expensive: Asset
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.5%); the inversion above states its own rate.
Per-Model Detail (n=17)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $50.32 | 0.58x | yes | FCF base $0.2B, growth -0% (input: historical growth), terminal g 0.5%, WACC 6.5%, 5yr projection |
| DCF Exit Multiple | Growth | $37.81 | 0.77x | yes | Exit EV/EBITDA: 13.2x / 15.2x / 17.2x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $23.38 | 1.25x | yes | P/E 18x (static sector reference · 2026-04), scenarios: 15.3x / 18.0x / 20.7x (bear / base = reference held flat / bull), EV/EBITDA 12x |
| Simple DDM | Growth | $21.18 | 1.38x | yes | DPS $1.19, g=3.5% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3% |
| Two-Stage DDM | Growth | $2.19 | 13.33x | yes | Stage 1: -42% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $15.72 | 1.86x | yes | BV/sh $42.09, ROE (TTM) 3.5%, ke 9.3% |
| Two-Stage Excess Return | Asset | $9.66 | 3.02x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $19.42 | 1.50x | yes | Rev $4.3B, growth -0% (input: historical growth; tapered), Terminal P/S: 0.3x / 0.3x / 0.4x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $30.29 | 0.96x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.21B × (1−40%) / WACC 6.5% → EPV (no growth) |
| Residual Income | Asset | $7.26 | 4.02x | yes | BV $42.09 + 5yr PV of (ROE (TTM) 3.5% − Kₑ 9.3%) × BV; BV grows 2.2%/yr |
| Graham Number | Asset | $37.06 | 0.79x | yes | √(22.5 × EPS $1.45 × BVPS $42.09) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $20.66 | 1.41x | yes | EBITDA $0.13B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $27.89 | 1.05x | yes | FCF $174.9M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $25.59 | 1.14x | yes | SBC-adj FCF $0.16B (FCF $0.17B − SBC $0.01B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $1.22 | 23.93x | yes | EPS $1.45 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | $3.06 | 9.54x | yes | BV $42.09 × (ROIC 0.5% / WACC 6.5%) |
| P/Sales Sector | Relative | $222.90 | 0.13x | yes | Revenue $4.27B × sector P/S 2.5x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $15.68 | 1.86x | yes | EPS $1.45 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $392.2m |
| Net debt / NOPAT (after-tax) | 6.08x |
| Net debt / operating income (pre-tax) | 3.52x |
| Interest coverage | 9.9x |
| Share count CAGR (dilution) | 0.0% |
| Burning cash | no |
Bullet Takeaways
At $27.44 Fresh Del Monte is priced at about 17x company-wide operating income, implying an operating decline of about 4.4% a year; the reverse-DCF band of roughly $43 to $68 sits well above the price, so the stock is priced for shrinkage and the bet is whether the trajectory stabilizes.
The earnings-power and relative-multiple families support the price while the asset-based family says expensive, reflecting a thin trailing operating margin near 2.6% on an asset-heavy base; the transformative item is the $308 million Del Monte Foods acquisition, which adds a branded Prepared Foods segment and a guided 13% to 15% net-sales rise in 2026.
The risk is commodity volatility plus added leverage: Q1 2026 EPS fell to $0.21 from $0.65 and net income dropped 68% on produce oversupply, while long-term debt rose to $438 million for the acquisition and management warned of working-capital and cash-flow volatility from the branded-foods inventory buildup.
Bull Case
The single most decisive number for Fresh Del Monte is the gap between what the price assumes and what the business has shown it can do across a cycle. At $27.44 (June 27, 2026) the price embeds an operating decline of about 4.4% a year for five years; the market is pricing in shrinkage from a global fruit-and-vegetable company that owns farms, ships, ports, and brands. That number, if it flips from decline to even flat, would re-rate the stock. The bull case is that pricing a perpetual decline into a vertically integrated produce business with a recognized brand and a new packaged-foods leg is too pessimistic.
The business is asset-rich and integrated in a way few food companies are. Fresh Del Monte grows, sources, ships, and distributes fresh produce globally, with bananas and pineapples as core categories, and that vertical integration is a real cost and reliability advantage in a fragmented industry. The recent quarter showed the swing factors at work: overall net sales were about $1 billion, with declines tied to divestitures and oversupply partially offset by gains in bananas, pineapples, and foreign exchange. Commodity produce is volatile quarter to quarter, but the franchise endures, and the valuation families reflect that: the earnings-power and relative-multiple frames support the price, marking this as a value-and-asset-supported name rather than a growth bet.
The transformative element is the Del Monte Foods acquisition, closed for $308 million, which adds a branded packaged-foods platform and a new Prepared Foods segment. Management projects net sales to rise 13% to 15% in 2026, with Del Monte Foods adding about $600 million, shifting the mix toward higher-margin, branded, shelf-stable products that are less exposed to fresh-produce price swings. The bull wager is that a decline-priced, asset-backed produce company building a branded-foods leg is mispriced, and that any stabilization in the core plus contribution from the acquisition closes the gap.
Bear Case
The qualitative problem with Fresh Del Monte is that it is, at its core, a price-taker in a commodity it cannot control. Bananas and pineapples are grown by many producers, sold into oversupplied markets, and priced by global supply and weather rather than by the company's brand. The numbers are evidence of that fragility: first-quarter 2026 EPS fell to $0.21 from $0.65 a year earlier, net income dropped 68% to $10.0 million, and revenue fell 4.9% to $1.04 billion, with management citing oversupply, divestitures, and market conditions. A business whose profit can fall by two-thirds in a single year on factors outside its control is not the steady compounder the asset base might suggest, and the decline the price embeds is not obviously unreasonable given how the earnings actually behave.
The asset frame is flashing the warning. While the earnings-power and relative-multiple families support the price, the asset-based family says the stock is expensive. For a company this asset-heavy (farms, ships, ports), the asset frame is not a footnote: it says the market is paying more than the productive capital base would justify on its demonstrated returns. The recent return on that capital has been thin, with a trailing operating margin around 2.6%, which is the level of a low-margin distributor rather than a branded-goods company, and it is the reason the asset valuation balks at the price.
The acquisition that anchors the bull case also raises the bear's central caution: leverage and execution. To buy Del Monte Foods, long-term debt rose to $438 million from $173 million at year-end, and management itself warned of further working-capital and cash-flow volatility in 2026 from the seasonal inventory buildup the expanded branded-foods model requires. Integrating a packaged-foods business is a different operating discipline from shipping fresh produce, and the projected adjusted EBITDA contribution of $23 million as operations normalize is modest against the added debt and complexity. The bear's view is straightforward: a low-margin, commodity-exposed produce company has taken on debt and integration risk to chase a branded-foods turn, while the asset frame already says the price is too high for what the capital base reliably earns.
Valuation
Fresh Del Monte is priced at about 17x company-wide operating income, which inverts to roughly minus 4.4% operating-income growth a year for five years at a 7% cost of capital. In other words, the price embeds a modest perpetual decline, which the inversion reads as within range against the company's own volatile history.
The method families split in a way that frames the debate. The earnings-power and relative-multiple families support the price, while the asset-based family says expensive. For an asset-heavy produce company, that asset flag matters: it reflects a thin trailing operating margin near 2.6% on a large capital base, so the productive assets are not earning much relative to what they would be worth deployed elsewhere. The bull leans on the earnings and peer frames plus the branded-foods optionality; the bear leans on the asset frame and the commodity volatility behind the earnings.
The honest read: this is a low-margin, asset-backed, commodity-exposed business where the price already assumes decline, so the bet is really about whether the Del Monte Foods acquisition shifts the mix enough to stabilize or reverse that trajectory. The case improves if the branded Prepared Foods segment lifts margin and the projected 13% to 15% net-sales growth materializes; it worsens if produce oversupply persists and the added debt (long-term debt up to $438 million) plus integration complexity weigh on cash flow. The cleaner way to weigh the price is against normalized, mid-cycle operating margin and the early contribution from Del Monte Foods, rather than a single weak quarter where EPS fell to $0.21, and to treat the implied decline as a low bar that even modest stabilization would beat.
Catalysts
The most recent catalyst was the first-quarter 2026 report (early May 2026), which was weak on the core. Overall net sales were about $1.04 billion, down 4.9% year over year, EPS fell to $0.21 from $0.65, and net income dropped 68% to $10.0 million. Management attributed the declines to divestitures, produce oversupply, and market conditions, partially offset by gains in bananas, pineapples, and foreign exchange (AOL, Motley Fool, Simply Wall St).
The transformative catalyst is the Del Monte Foods acquisition, closed for $308 million, which creates a unified branded platform and adds a new Prepared Foods reporting segment. Management projects net sales to rise 13% to 15% in 2026, with Del Monte Foods contributing about $600 million and adjusted EBITDA guidance of $23 million as operations normalize. To fund it, long-term debt rose to $438 million from $173 million at year-end (Motley Fool, Fresh Del Monte 8-K).
The forward catalysts are the integration of Del Monte Foods and the produce-pricing backdrop. The thesis turns on whether the branded Prepared Foods segment lifts margin and the guided sales growth materializes, and on whether fresh-produce oversupply eases. A clean integration with margin uplift would support the case that the decline-priced stock is mispriced; continued produce weakness, working-capital strain from the seasonal inventory buildup management flagged, or integration missteps would be the clearest near-term risks. The next quarterly print is the test of the early acquisition contribution (AOL, Fresh Del Monte 8-K).
Peer Cohorts (Per Segment, With Filing Citations)
Fresh and value-added products / Banana / Other products and services (reported)
- DOLE (Dole plc)
- (no filing in the citation store)
- CALM (Cal-Maine Foods, Inc.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.