The World trade Organization actually ruled in favor of the U.S. over the European Union having tariffs on bananas. This may actually lead to million of dollars in commercial sanctions. The E.U. can still appeal this decision, and since it is roughly a ten year fight you can imagine they will.
This has kept bananas from Latin America and the U.S. out of Europe, or at least out competitively. Chiquita Brands (NYSE: CQB) is the pure-play stock to watch on the trade. We have seen various estimates on what this would mean financially for Chiquita, but at $16.64 on Thursday’s close, we’d note that shares are down from $20+ in mid-December. Analysts have an average price target of $24.00 or higher.
CNN had already reported in December that the WTO ruled banana tariffs were illegal back in December. Stay tuned.
Jon C. Ogg
February 8, 2008
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