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Dole (DOLE) Moves 7.8% Higher: Will This Strength Last?

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Dole (DOLE - Free Report) shares soared 7.8% in the last trading session to close at $11.53. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 10.9% gain over the past four weeks.

Dole’s agreement to sell the Dole Fresh Vegetables Division to Fresh Express Incorporated for nearly $293 million in cash, drove the stock higher. Fresh Express is the wholly owned subsidiary of Chiquita Holdings Limited. Dole’s Fresh Vegetables Division expects to sell its operations related to the processing and sale of whole produce under the agreement. The division has agricultural operations and four processing plants in the United States and more than 3,000 employees.

Dole’s Fresh Vegetables Division reported sales of $1.28 billion as of Dec 31, 2021. The transaction is subject to regulatory approval and customary closing conditions. Dole expects to use the proceeds from the transaction to reduce debt.

This fresh fruit and vegetable company is expected to post break-even quarterly earnings per share in its upcoming report, which represents a year-over-year change of -100%. Revenues are expected to be $2.24 billion, down 0.3% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Dole, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on DOLE going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Dole is part of the Zacks Agriculture - Operations industry. Limoneira (LMNR - Free Report) , another stock in the same industry, closed the last trading session 3% higher at $13.13. LMNR has returned 4.4% in the past month.

For Limoneira, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.36. This represents a change of -2.9% from what the company reported a year ago. Limoneira currently has a Zacks Rank of #5 (Strong Sell).


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