Dole (DOLE), mcap=$1200m

DOLE pitch:
– One of the world’s largest producers of fresh bananas and pineapples.
– 100% upside if DOLE rerates to peer multiples.
– Stock is cheap due to the drag by the loss-making vegetable division.
– This division was recently sold at a higher multiple than attributed to the whole business.
– At 5.3x EBITDA the company trades at a large discount to an extremely similar peer $FDP.
– Due to reduced leverage company is in the position to return cash to shareholders.
– With DOLE trading 13% below BV, the downside is well protected by hard assets on the balance sheet – productive land, ocean vessels and etc.

DOLE valuation:
– Trades at 5.3x forward EBITDA vs 8.4x for peer FDP.
– Shares are worth 7.5x 2023 EBITDA estimate of $390m and 15x 2023 EPS of $1.47.
– This would still be a turn cheaper than FDP.

Exp. gain: +100% to $22/share.

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