Chew raised his FY2023 earnings forecast by 19% to an adjusted US$123 million. In a Dec 12 note, Chew maintained “buy” on Del Monte but with a lower target price of 67 cents from 69 cents previously, with a “huge 50% discount” to the industry valuation due to its smaller market cap and higher gearing.
Owing to price increases, food and beverage consumer company Del Monte posted record margins for 2QFY2023 ended October. With 1HFY2023 revenue and patmi at 49% and 67% of FY2023 forecasts, PhillipCapital’s head of research Paul Chew says the company is performing “better than expected”.
2QFY2023 earnings jumped 38% y-o-y to US$49.5 million ($67.09 million) supported by revenue growth, up 7%. The continued push towards branded products drove gross margins to 29%, and is ahead of Chew’s modelled 26% from increases in selling price.
