- DOLE priced its IPO at the low end of an already-lowered range and then the stock traded down from there on the first day of trading.
- Based on a cash flow analysis, I estimate the stock should currently be worth ~$24 per share, representing ~60% upside from the current price.
- On an EV/EBITDA basis, DOLE trades at a two-turn discount to its closest peer - Fresh Del Monte. Closing that gap would drive the upside I am forecasting.
- Sell-side initiations and the initiation of a dividend could be catalysts.
- In a worst-case scenario of poor cash flow generation, I can see an additional ~30% downside, representing a 2:1 risk/reward scenario.
For further details see:
Dole: Sour IPO Presents Juicy Opportunity For Value Shoppers