FRESH DEL MONTE PRODUCE INC (FDP) Stock Analysis
FRESH DEL MONTE PRODUCE INC (FDP) Stock Analysis
Overall Grade: F (Concerning)
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FRESH DEL MONTE PRODUCE INC faces challenges in financial performance that warrant careful analysis.
Key Metrics:
| Metric | Value | Context |
|---|---|---|
| ROIC | 4.1% | Below expectations |
| FCF Margin | 4.2% | Cash flow pressure |
| Debt/Equity | 0.1x | Conservative leverage |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
What is FRESH DEL MONTE PRODUCE INC's Profitability and ROIC?
FRESH DEL MONTE PRODUCE INC's return on invested capital of 4.1% is below the typical cost of capital. Gross margin of 9.2% with operating margin at 3.2% reflects the company's moderate market position.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 4.1% | Warning | Below cost of capital |
| Return on Equity (ROE) | 4.5% | Warning | Moderate equity returns |
| Gross Margin | 9.2% | Warning | Competitive pricing environment |
| Operating Margin | 3.2% | Warning | Moderate operational efficiency |
How Strong is FRESH DEL MONTE PRODUCE INC's Cash Flow Quality?
FRESH DEL MONTE PRODUCE INC generated $181.3M in free cash flow over the trailing twelve months, representing a 4.2% margin. Cash earnings quality is strong, with operating cash flow exceeding net income by 2.7x.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Free Cash Flow Margin | 4.2% | Warning | Thin cash margins |
| Free Cash Flow (TTM) | $181.3M | Good | Positive cash generation |
| OCF/Net Income | 2.7x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
What is FRESH DEL MONTE PRODUCE INC's Financial Health?
FRESH DEL MONTE PRODUCE INC's debt-to-equity ratio of 0.1x indicates conservative leverage.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Debt to Equity | 0.1x | Excellent | Conservative capital structure |
| Net Cash Position | $-112.0M | Adequate | Net debt position |
Is FRESH DEL MONTE PRODUCE INC Stock Overvalued or Undervalued?
FRESH DEL MONTE PRODUCE INC trades at a P/E of 18.9x, representing a premium to the sector median of N/A. Free cash flow yield of 10.6% offers attractive cash returns.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| P/E Ratio | 18.9x | Adequate | Reasonable valuation |
| EV/Sales | 0.4x | Excellent | Attractive revenue multiple |
| FCF Yield | 10.6% | Excellent | Attractive cash return |
| Dividend Yield | 3.3% | Adequate | Meaningful income |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 4.1% | Bottom 50% | 1.0x below |
| Free Cash Flow Margin | 4.2% | Top 50% | - |
| Gross Margin | 9.2% | Bottom 25% | 0.3x below |
| Operating Margin | 3.2% | Bottom 50% | 0.5x below |
| Return on Equity (ROE) | 4.5% | Bottom 50% | 0.6x below |
| P/E Ratio | 18.9x | N/A | - |
Rating Thresholds
Return on Invested Capital (ROIC)
Measures how efficiently a company uses its debt and equity capital to generate profits. ROIC above 15% typically indicates a competitive moat.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Exceptional capital efficiency, strong competitive moat |
| Good | 12% - 20% | Above-average returns, sustainable competitive position |
| Adequate | 8% - 12% | Around cost of capital, moderate competitive position |
| Warning | 4% - 8% | Below cost of capital, value may be eroding |
| Red flag | < 4% | Significant capital destruction, fundamental issues |
Current: 4.1% (Warning - Bottom 50% of sector (median: 4.3%))
Free Cash Flow Margin
The percentage of revenue converted to free cash flow. Higher margins indicate stronger cash generation and business quality.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Strong cash generation, high-quality business |
| Good | 10% - 20% | Healthy cash conversion |
| Adequate | 5% - 10% | Moderate cash generation |
| Warning | 0% - 5% | Thin cash margins, capital intensive |
| Red flag | < 0% | Cash burn, potential liquidity concerns |
Current: 4.2% (Warning - Top 50% of sector (median: 0.0%))
Gross Margin
Revenue minus cost of goods sold as a percentage. Higher gross margins indicate pricing power and competitive advantage.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 50% | Strong pricing power and competitive moat |
| Good | 30% - 50% | Healthy margins, differentiated product |
| Adequate | 20% - 30% | Moderate margins, competitive industry |
| Warning | 10% - 20% | Thin margins, commodity-like business |
| Red flag | < 10% | Very thin margins, structural challenges |
Current: 9.2% (Red flag - Bottom 25% of sector (median: 31.2%))
Debt to Equity Ratio
Total debt divided by shareholders' equity. Lower ratios indicate more conservative financing and reduced financial risk.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | < 0.3x | Conservative leverage, strong balance sheet |
| Good | 0.3x - 0.7x | Moderate leverage, healthy financial position |
| Adequate | 0.7x - 1.5x | Elevated leverage, monitor closely |
| Warning | 1.5x - 3.0x | High leverage, increased financial risk |
| Red flag | > 3.0x | Excessive leverage, potential distress risk |
Current: 8.7% (Excellent)
P/E Ratio (Price-to-Earnings)
Stock price divided by earnings per share. Lower P/E may indicate undervaluation, while higher P/E suggests growth expectations.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | < 15x | Attractively valued, potential opportunity |
| Good | 15x - 25x | Fair value for quality company |
| Adequate | 25x - 35x | Growth premium, justify with earnings growth |
| Warning | 35x - 50x | High expectations priced in |
| Red flag | > 50x or negative | Speculative valuation or losses |
Current: 18.9x (Adequate)
Free Cash Flow Yield
Free cash flow per share divided by stock price. Higher FCF yield indicates better cash return relative to valuation.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 8% | High cash return, potential value opportunity |
| Good | 5% - 8% | Solid cash yield |
| Adequate | 3% - 5% | Moderate cash return |
| Warning | 1% - 3% | Low cash yield, growth expectations |
| Red flag | < 1% | Minimal cash return to shareholders |
Current: 10.6% (Excellent)
Frequently Asked Questions
Q: What is FRESH DEL MONTE PRODUCE INC's Return on Invested Capital (ROIC)?
FRESH DEL MONTE PRODUCE INC (FDP) has a trailing twelve-month Return on Invested Capital (ROIC) of 4.1%. This compares below the sector median of 4.3%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is FRESH DEL MONTE PRODUCE INC's Free Cash Flow Margin?
FRESH DEL MONTE PRODUCE INC (FDP) has a free cash flow margin of 4.2%, generating $181.3 million in free cash flow over the trailing twelve months. A thin FCF margin may indicate heavy reinvestment or operational challenges.
Q: Is FRESH DEL MONTE PRODUCE INC stock overvalued or undervalued?
FRESH DEL MONTE PRODUCE INC (FDP) trades at a P/E ratio of 18.9x, which is above the sector median of N/A. The EV/Sales multiple is 0.4x. Free cash flow yield is 10.6%, which represents an attractive cash return to investors.
Q: Does FRESH DEL MONTE PRODUCE INC pay a dividend?
FRESH DEL MONTE PRODUCE INC (FDP) currently pays a dividend yield of 3.3%. Including share buybacks, the total shareholder yield is 5.1%. This yield is moderate, suggesting a balance between income and growth reinvestment.
Q: What is FRESH DEL MONTE PRODUCE INC's revenue and earnings growth?
FRESH DEL MONTE PRODUCE INC (FDP) grew revenue by 1.0% year-over-year. Earnings per share decreased by 37.0% compared to the prior year. Modest growth indicates a mature business with stable demand.
Q: Is FRESH DEL MONTE PRODUCE INC buying back stock?
FRESH DEL MONTE PRODUCE INC (FDP) repurchased $29.8 million of stock over the trailing twelve months. This represents a buyback yield of 1.7%.
Q: How does FRESH DEL MONTE PRODUCE INC compare to competitors in Other?
Compared to other companies in Other, FRESH DEL MONTE PRODUCE INC (FDP) shows: ROIC of 4.1% is below the sector median of 4.3% (Bottom 49%). FCF margin of 4.2% exceeds the sector median of 0.0% (Top 36% of sector). Gross margin at 9.2% is 21.9 percentage points lower than sector peers. These rankings are based on MetricDuck's analysis of all Other companies with available SEC filings.
Q: What warning signs should I watch for with FRESH DEL MONTE PRODUCE INC?
Investors in FRESH DEL MONTE PRODUCE INC (FDP) should monitor these potential warning signs: 1) FCF margin is thin at 4.2%, leaving limited buffer for economic downturns. 2) ROIC has been declining, potentially signaling deteriorating competitive position. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-10-29. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
This analysis is for informational purposes only and does not constitute investment advice.