Cal-Maine Foods: Buy Rating Underpinned by Post-HPAI Normalization, Specialty Mix Shift, and Undervalued Earnings Resilience

In a report released today, Ben Klieve from Benchmark Co. maintained a Buy rating on Cal-Maine Foods, with a price target of $100.00.

Ben Klieve has given his Buy rating due to a combination of factors tied to Cal-Maine’s positioning and industry dynamics. He expects upcoming quarterly results to appear weaker year over year because egg prices have fallen from the unusually high levels seen during the height of the HPAI-driven disruptions, but views this as a normalization rather than a deterioration of the underlying business. In his view, a period of more typical pricing will highlight the company’s improved earnings resilience, particularly as its business continues shifting away from low-margin commodity eggs toward higher-value specialty products with more stable pricing. He also notes that his near-term earnings forecasts are only modestly below consensus and that he sees at least a neutral to slightly positive bias to his bottom-line expectations for the quarter.

Klieve’s longer-term outlook incorporates stabilizing commodity egg prices as the national layer flock recovers and HPAI-related depopulations slow, which should reduce volatility and support more predictable profitability. His model assumes commodity prices remain above USDA benchmarks, reflecting Cal-Maine’s mix shift toward contract-based pricing, which should further enhance margin visibility and earnings quality. He believes this structural transition in Cal-Maine’s portfolio and the broader sector is not fully appreciated in the current stock valuation, creating an attractive risk/reward profile. Taken together, the normalization of industry conditions, the move toward specialty and contract-based sales, and what he views as an undervalued share price underpin his Buy recommendation.

In another report released on December 30, TipRanks – OpenAI also reiterated a Buy rating on the stock with a $94.00 price target.

Based on the recent corporate insider activity of 31 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of CALM in relation to earlier this year.