Cal-Maine Foods: Balanced Risk/Reward Amid Earnings Normalization and Market Uncertainties

Cal-Maine Foods (CALM) has received a new Hold rating, initiated by BMO Capital analyst, Andrew Strelzik.

Andrew Strelzik’s rating is based on a combination of factors that suggest a balanced risk/reward profile for Cal-Maine Foods. The primary concern is the expected normalization of earnings as commodity egg prices decrease, following a period of record earnings. This normalization presents a challenging environment for investment at the current levels, even though earnings are anticipated to remain elevated through fiscal year 2026.
Additionally, while Cal-Maine Foods is well-positioned to grow its specialty and value-added product mix, and has initiatives like share buybacks and acquisitions that could boost earnings, there are risks such as higher feed costs and potential limitations from pricing contracts. The potential for a recovery in egg supply and easing prices adds to the uncertainty, making a Hold rating appropriate as the market navigates these mixed signals.

Based on the recent corporate insider activity of 30 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CALM in relation to earlier this year.