Select Harvests (ASX:SHV) issued a mixed trading update, pointing to continued strength in almond prices but also noting additional costs driven by the wet harvest season, Jarden said in a Tuesday note.
The company said more drying than previously expected, an extended processing period, and other non-recurring items contributed to a further AU$7 million in costs in the fiscal second half, in addition to the AU$6.9 million forecast earlier.
Jarden said it was "surprised by the magnitude of this step-up" given that the company's harvest window falls around February to April, well before it provided outlook commentary in late May.
"That said, we understand the intensity of the wet harvest led to slower production and more extended periods of hulling and shelling than expected, which increased costs," the investment firm said.
Jarden cut its fiscal 2026 EPS forecast for Select Harvests by 15%, largely due to higher one-off wet harvest costs, but raised the fiscal 2027 and fiscal 2028 EPS estimates by 9% on higher almond prices.
"Our bullish thesis on rising almond prices is on track," the equity research firm said, adding that the macro backdrop is also very positive despite some potential for commodity price volatility after a strong rally.
Jarden maintained an overweight rating on Select Harvests and raised its target price to AU$5.40 from AU$4.70.
The company's shares fell 7% in recent Wednesday trade.