Shares in agribusiness Costa Group Holdings are in a trading pause after falling more than 12 per cent lower to $2.53 just before noon.
The fall came after an analyst warning about a potential earnings impact from lower citrus supply and the entrenched avocado oversupply situation.
In a note, Credit Suisse analyst Larry Gandler cut Costa to neutral, from outperform, and slashed its target price to $2.80 (from $3.70) because while demand is strong for agribusiness Costa's produce, "supply and logistics remain a challenge".
"It appears the 2022 citrus season is not matching our previous expectations.
"The 2022 citrus supply is hampered by lower quality/disease in the Southern States (navel oranges) and logistics issues (lack of freight capacity and higher shipping cost)."
Credit Suisse believes Costa is navigating the situation better than the competition, but lower quality fruit and shipping delays are lowering prices.
"We now expect CGC AUD citrus export prices to be flat despite a near 10 per cent depreciation in the AUD-USD."
Separately, avocado pricing has not quite recovered to Credit Suisse's modelling.
"We lowered our citrus and avocado revenue/price for 2022. We carried some Avocado weakness into future years because the industry is entrenched in oversupply."
