American Vanguard ‘noisy’ Q3 doesn’t change value proposition, says Lake Street

Lake Street analyst Ben Klieve notes that Q3 results “varied dramatically” from estimates for American Vanguard (AVD) as revenue, gross profit and EBITDA fell “well short” of the firm’s forecasts, though it adds that the “overwhelming majority of this” was attributable to two products – Dacthal and Aztec. On balance, however, the “value proposition is unchanged” despite the “noisy quarter,” as material de-leveraging has begun and the firm expects an earnings trough in 2024 to rebound in 2025. While Q3 results “will not be a catalyst,” the firm believes “conditions exist for a convergence” of drivers that set up the stock as “a potential multi-bagger over the next 12-18 months,” adds the analyst, who keeps a Buy rating and $14 price target on the stock.