The Costa Group (ASX:CGC) share price is down 22%. Could it be a buy?

Shares in fruit and vegetable company Costa have been smashed today. We look at what that could mean for investors
The post The Costa Group (ASX:CGC) share price is down 22%. Could it be a buy? appeared first on The Motley Fool Australia. –

The Costa Group Holdings Ltd (ASX: CGC) share price is leading the S&P/ASX 200 Index (ASX: XJO) in losses on the market today.

The Costa share price is down 22.07% at the time of writing to $3.46 a share. That comes after Costa shares closed at $4.46 each yesterday, and opened at $3.74 a share this morning.

The Costa Group share price has been on something of a wild ride over the past 5 years.

Shares in the fruit and vegetable company last peaked in mid-2018, when the price got up to a high of more than $8 a share.

Deteriorating growing conditions and supply issues then battered the company, and by December 2019, Costa was down to just $2.44 a share.

In the year-and-a-half since, Costa had been on something of a recovery.

The company rose close to 100% by the middle of April this year, and topped out at $4.89 a share on 16 April. After today’s move, shares are down close to 30% from those highs.

So what’s going on today?

As we discussed this morning, Costa’s slide seems to have been in response to the company’s annual general meeting.

The highlights (or in this case, lowlights) were released to the markets this morning before open.

Costa told investors its guidance for 2021 would need to be revised.

While berry and avocado sales have reportedly been solid, the company warned its domestic mushroom, citrus and tomato productions were all experiencing issues.

Even so, Costa expects its 2021 first-half performance to be slightly ahead of the same period in 2020. Still, the markets were evidently expecting a bit more, and have seemingly punished Costa as a result.

Are Costa shares a buy today after the dip?

A share price fall of this magnitude might have some investors wondering if this is a buy-the-dip kind of opportunity today.

Well, one broker who agrees is investment bank Goldman Sachs. According to CommSec, Goldman has reiterated a ‘buy’ rating on Costa after today’s announcement, with a 12-month price target of $5.35 a share.

Goldman thinks Costa will manage to improve its domestic production in the second half of the year, which will supplement strong international markets.

That target would imply a share price upside of roughly 54% on today’s Costa share price.

Learn where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

More reading

Why ALS, Costa, Fisher & Paykel Healthcare, & Ramsay shares are falling

ASX 200 flat: Costa crashes & Fisher & Paykel Healthcare tumbles

Costa (ASX:CGC) share price crashes 23% on AGM update
The ASX’s China problem is getting worse… and quickly

The post The Costa Group (ASX:CGC) share price is down 22%. Could it be a buy? appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!