Although the market has dropped lower again, that didn't stop the Costa Group Holdings Ltd (ASX: CGC) share price from storming higher this morning.
The horticulture company's shares climbed as much as 3% higher to $5.19 in morning trade.
Its shares have since given back a good portion of these gains, but still sit around 1% higher at the time of writing.
Why did the Costa share price storm higher today?
Investors appear to have been scrambling to get hold of Costa's shares after it was the subject of a positive broker note this morning.
According to a note out of Citi, its analysts have initiated coverage on the company with a buy rating and $5.80 price target.
This price target implies potential upside of over 15% from its last close price.
Why is the broker bullish on Costa?
Citi likes Costa due to its belief that the company has positioned itself well in lucrative produce categories such as avocados.
It expects this to support strong sales and earnings growth. In fact, between FY 2018 and FY 2021, the broker has forecast compound growth of 10% per annum for revenue and 25% for operating earnings.
Its analysts expect Costa to achieve earnings per share of 25.5 cents in FY 2019 and then 29.2 cents in FY 2020, which means that its shares are currently changing hands at approximately 20x estimated forward earnings.
Citi isn't the only broker that is positive on the company's prospects. A note out of Goldman Sachs late last month reveals that its analysts have a buy rating and $5.75 price target on its shares.
Goldman has forecast earnings per share of 22 cents in FY 2019 and 27 cents in FY 2020.
Should you invest?
I agree with both brokers on Costa and think that its shares are trading at an attractive level for a patient long-term investment.
In addition to Costa, I think agricultural-focused property trust Rural Funds Group (ASX: RFF) and supermarket giant Coles Group Ltd (ASX: COL) are worth considering as well.
