ASX consumer staples stock Select Harvests Ltd (ASX: SHV) is set to benefit from tailwinds over the next 12 months according to a new report from Bell Potter.
Select Harvests is an integrated grower, processor and marketer of almonds owning and operating farming and processing assets in Australia.
It offers a vertically integrated model with core capabilities in farming, processing and marketing.
The company has experienced some significant volatility over the past 12 months. Its share price has fluctuated between highs of $5.20 and lows of $3.50.
It currently sits on the high end of this range, closing trading yesterday at $4.90.
However, the team at Bell Potter believe it could be set for significant growth in the next year.
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Almond prices continue to strengthen
According to a new report from Bell Potter, almond prices have continued to strengthen, implying upside to consensus FY27e expectations.
US almond prices are up around 20% since SHV's 1H26 results, driven by smaller kernels and expectations that US production will again fall short of USDA forecasts.
While the price increase is unlikely to have much impact on FY26 earnings, it significantly improves the FY27 outlook.
Bell Potter believes consensus pricing of around A$10/kg is too conservative compared with current spot prices of about A$12/kg.
Input costs are starting to ease, although Bell Potter remains cautious because the company has already locked in fertiliser costs for FY27 and water costs/requirements may remain elevated due to the drier seasonal outlook. They expect costs to move closer to long-term averages from FY28.
Based on this guidance, Bell Potter has increased its almond price assumptions, resulting in FY27 EPS being upgraded by 20% and FY28 EPS by 5%.
Target price rises
The broker has subsequently raised its target price to $6.05 (previously $5.30).
From current levels, this indicates an upside potential of 23% for this ASX consumer staples stock.
Almond prices are strengthening and the SHV share price has lagged this move, continuing to trade below its market backed asset value of ~$5.30ps. At spot almond price levels, we would estimate FY27e EPS in a range of 53-72¢ps based on production guidance comparable to FY26e (i.e. 28,000-31,000kt), a level materially higher than the current consensus EPS level of ~37¢ps. The longer-term almond thematic has always been the key attraction to SHV, however, there is the scope for a near term sugar hit should the current positive market backdrop remain in place.
