Value
9.0/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 6.5 |
| P/S | 10.0 |
| EV/EBITDA | 7.0 |
| Fwd P/E | 9.5 |
| PEG | 10.0 |
- ▸Forward P/E: 8.7x
- ▸PEG: 0.07
- ▸Attractively valued
FDP · Why this verdict
Why Del Monte (FDP) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Despite positive reported net income, free cash flow is negative — the company is not converting its accounting earnings into cash — a condition the quality assessment flags as a red flag that undermines confidence in the reported earnings stream as a measure of business health. Quality breakdown | Free cash flow turns positive for 2 consecutive quarters, demonstrating genuine improvement in cash generation and validating the income statement signal. | →Stable |
| CounterNegative free cash flow in a restructuring or investment phase is not always indicative of structural impairment; if working capital intensity declines as the business rationalizes, cash conversion could recover materially without a change in reported profitability. | ||
The company has beaten consensus estimates in all four recent quarters with an average positive surprise of approximately 55%, including one quarter in which actual results were 150% above the initial estimate — a streak that signals management expectations discipline or significant restructuring benefits flowing through the income statement. Earnings | EPS beats persist for at least 2 of the next 4 quarters with average positive surprise above 10%, sustaining the beat narrative. | →Stable |
| CounterThe most recent quarter's positive surprise was just 1.6%, well below the magnitude of the three prior quarters, suggesting the large-surprise pattern may be normalizing — the extraordinary beat streak could be tapering toward ordinary estimation variance rather than continuing. | ||
The stock has formed a death cross, trades below its 200-day moving average, and carries an RSI of 26 — a configuration indicating capitulation-level selling pressure and a technical hard block that precludes a sustained near-term recovery without a meaningful shift in buying interest. Warnings | Price reclaims the 200-day moving average with the slope turning positive, and RSI sustains above 40 for 4 consecutive weeks, invalidating the breakdown. | →Stable |
| CounterAn RSI of 26 is in deeply oversold territory where mean-reversion rallies are historically common; even without a fundamental catalyst, sentiment can shift quickly from such extremes and generate a sharp technical recovery. | ||
At a forward price-to-earnings multiple of 8.5 times and with analyst consensus targets implying more than 50% upside from current levels, the stock trades at a substantial discount — a spread that would represent significant value if the quality and momentum concerns can be resolved. Sentiment breakdown | Price appreciates more than 25% toward analyst consensus targets over the next 12 months as quality metrics visibly improve. | →Stable |
| CounterWide gaps between market price and analyst consensus targets can persist for extended periods when quality metrics are impaired; without free cash flow recovery and revenue growth resuming from the current declining trend, the deep apparent discount may reflect genuine fundamental risk rather than mispricing. | ||
Despite positive reported net income, free cash flow is negative — the company is not converting its accounting earnings into cash — a condition the quality assessment flags as a red flag that undermines confidence in the reported earnings stream as a measure of business health.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive for 2 consecutive quarters, demonstrating genuine improvement in cash generation and validating the income statement signal.
CounterNegative free cash flow in a restructuring or investment phase is not always indicative of structural impairment; if working capital intensity declines as the business rationalizes, cash conversion could recover materially without a change in reported profitability.
The company has beaten consensus estimates in all four recent quarters with an average positive surprise of approximately 55%, including one quarter in which actual results were 150% above the initial estimate — a streak that signals management expectations discipline or significant restructuring benefits flowing through the income statement.
→StableEarnings
- Expectation
- EPS beats persist for at least 2 of the next 4 quarters with average positive surprise above 10%, sustaining the beat narrative.
CounterThe most recent quarter's positive surprise was just 1.6%, well below the magnitude of the three prior quarters, suggesting the large-surprise pattern may be normalizing — the extraordinary beat streak could be tapering toward ordinary estimation variance rather than continuing.
The stock has formed a death cross, trades below its 200-day moving average, and carries an RSI of 26 — a configuration indicating capitulation-level selling pressure and a technical hard block that precludes a sustained near-term recovery without a meaningful shift in buying interest.
→StableWarnings
- Expectation
- Price reclaims the 200-day moving average with the slope turning positive, and RSI sustains above 40 for 4 consecutive weeks, invalidating the breakdown.
CounterAn RSI of 26 is in deeply oversold territory where mean-reversion rallies are historically common; even without a fundamental catalyst, sentiment can shift quickly from such extremes and generate a sharp technical recovery.
At a forward price-to-earnings multiple of 8.5 times and with analyst consensus targets implying more than 50% upside from current levels, the stock trades at a substantial discount — a spread that would represent significant value if the quality and momentum concerns can be resolved.
→StableSentiment breakdown
- Expectation
- Price appreciates more than 25% toward analyst consensus targets over the next 12 months as quality metrics visibly improve.
CounterWide gaps between market price and analyst consensus targets can persist for extended periods when quality metrics are impaired; without free cash flow recovery and revenue growth resuming from the current declining trend, the deep apparent discount may reflect genuine fundamental risk rather than mispricing.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Del Monte has produced four consecutive earnings beats with an unusually large average surprise and trades at a steep discount to analyst consensus targets — but free cash flow is negative, business quality sits well below acceptable floors, and a confirmed technical breakdown all indicate that the apparent value opportunity carries elevated risk until fundamental quality improves.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.2 |
| ROA | 2.2 |
| Gross margin | 0.0 |
| Op margin | 1.4 |
| Net margin | 0.8 |
| Current ratio | 8.0 |
| FCF quality | 0.0 |
| Moat | 3.9 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -69% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
- ▸Quality concerns
Growth
5.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 1.3 |
| EPS growth | 10.0 |
- ▸Declining revenue: -5%
Momentum
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 4.7 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -2.0%/30d — confirmed downtrend
Sentiment
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.0 |
| Analyst rating | 5.0 |
| Price target | 9.9 |
- ▸Analyst upside: 78%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $11,665 (0.001% of mkt cap)
Peer rank
4.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.7 |
| quality rank | 5.0 |
| growth rank | 1.4 |
Technical
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.4 |
| support resistance | 5.9 |
| 52w position | 3.6 |
Risk (lower is worse)
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.6 |
| days to cover | 7.1 |
| volatility | 4.2 |
| put call | 8.1 |
| implied vol | 5.6 |
| beta | 10.0 |
| debt equity | 8.8 |
Catalyst
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.2 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 411.0%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (8)
- MOMENTUM:6.6>=5.5
- ASYMMETRY:5.5>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:30d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (1)
- DEATH_CROSS:momentum=6.6>=5.0 recovering
Reward-to-Risk
5.45
Upside
+51.3%
Downside
9.4%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 48
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $1.4B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 9.0 could not lift the engine output above the verdict floor.
The strongest dimensions are Value at 9.0, Catalyst at 7.2, and Risk (lower is worse) at 7.1; the weakest are Quality at 2.8, Peer rank at 4.3, and Technical at 4.6. The V9 engine cleared all gates with 1 warning, producing an asymmetric reward-to-risk of 5.45 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Extraordinary Earnings Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Negative Free Cash Flow Conversion
Trip ifFree cash flow rises above $0 for 2 consecutive quarters.
- P3Confirmed Technical Breakdown
Trip ifPrice reclaims the 200-day moving average and RSI sustains above 40 for 4 consecutive weeks.
- P4Deep Discount To Analyst Targets
Trip ifPrice rises above $40, recovering more than 75% of the gap to the $44.20 analyst consensus target.