Citi Research believes that Select Harvests Limited (ASX:SHV) is attractive at this point in the almond price cycle and has forecasted net profit after tax (NPAT) to grow at 41% compound annual growth rate from FY20 to FY23.
According to the brokerage, the expected growth in NPAT forecast is based on the rebound in almond prices on lower Californian supply, the acquisition of the high-yielding Piangil orchard, and a normalisation of water costs.
Moreover, Citi anticipates FY21 sales of about A$260.9 million compared to A$248.3 million as reported in FY20.
The SHV stock has risen 5.6% this year, to A$5.51 as of last close, vs a 2.8% increase in the ASX 200 benchmark index ASX:XJO.
Meanwhile, SHV stock traded 4.174% higher at $5.740 at 10:43 AM AEDT.