Mission Produce Rides Mexico Supply Boost: How Long Can It Last?

Mission Produce, Inc. AVO is benefiting from a near-term boost in avocado supply from Mexico, which is its most important sourcing region, as stronger harvests improve availability and support volumes amid favorable weather. Robust Peruvian production and improved Mexican supply enabled the company to optimize its sourcing mix across multiple origins. This core capability differentiates the company in the marketplace with greater pricing flexibility and improved financial consistency over time.

AVO is effectively navigating typical seasonal dynamics in Mexico alongside maintaining strong customer relationships and healthy service levels. Its deep, long-standing partnerships in Mexico, combined with a diversified global sourcing network, enable Mission Produce to remain nimble and seamlessly shift to alternative countries of origin as market conditions evolve.

On its last earnings call, management had expected industry volumes to be roughly 15% higher in the fourth quarter year over year, thanks to a combination of ample Peruvian product in the supply chain as the harvest season nears completion and the transition to the new Mexican crop, which is likely to exceed last year’s levels on positive weather conditions.

However, this supply benefit from Mexico may be for the short term as supply normalizes, pricing moderates and weather, policy or demand-related factors reintroduce volatility. Nevertheless, Mission Produce is scaling production and broadening its global footprint, mainly across its key markets where avocado demand remains robust. In a nutshell, a stronger supply is allowing the company to better meet demand, deepen its presence in core markets and capitalize on favorable industry conditions.

AVO’s Competition

Corteva, Inc. CTVA and Adecoagro S.A. AGRO are the key companies competing with Mission Produce.

Corteva has been reinforcing its position as a global agricultural leader by integrating advanced seed technologies with sustainable crop protection solutions. Through strategic cost discipline and continued innovation in next-generation seed traits and sustainable crop protection, CTVA is effectively offsetting pressures from rising input costs and weaker commodity markets. By combining robust R&D investment with strong operational efficiency, Corteva is positioning itself to meet the world’s growing need for sustainable and resilient food production systems.

Adecoagro stands as a major force in South America’s sustainable agribusiness and renewable energy arenas, underlining its solid positioning in the wider consumer goods industry. AGRO’s flexibility to adjust production between sugar and ethanol to address market dynamics further bolsters its operational agility. Investments in digital transformation, renewable energy generation and precision agriculture have bolstered efficiency and reduced costs. Hence, Adecoagro remains resilient despite the challenging global price landscape.

AVO’s Price Performance, Valuation and Estimates

Mission Produce shares have gained 5.9% in the past six months against the industry’s 10.4% decline.

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From a valuation standpoint, AVO trades at a forward price-to-earnings ratio of 32.85X compared with the industry’s average of 12.39X.

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The Zacks Consensus Estimate for AVO’s fiscal 2025 and fiscal 2026 earnings per share (EPS) indicates a year-over-year decline of 9.5% and 28.4%, respectively. The company’s EPS estimate for fiscal 2025 and fiscal 2026 has been stable in the past 30 days.

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Mission Produce currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

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This article originally published on Zacks Investment Research (zacks.com).

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