Smithfield Foods, the Consumer Defensive sector company, was revisited by a Wall Street analyst yesterday. Analyst Peter Galbo from Bank of America Securities maintained a Buy rating on the stock and has a $29.00 price target.
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Peter Galbo has given his Buy rating due to a combination of factors related to Smithfield Foods’ planned acquisition of Nathan’s Famous. He views the deal favorably because it transforms a long-standing, successful licensing partnership into full ownership of a well-known premium brand at what he considers a reasonable valuation. By bringing Nathan’s operations in-house, Smithfield can eliminate existing royalty payments, capture additional margins, and better coordinate brand strategy across retail and foodservice channels. Although he notes open questions around Smithfield’s ability to manage restaurant operations and fully unlock the potential of Nathan’s branded products business, he believes the strategic upside outweighs these execution risks.
Galbo also emphasizes the attractive financial profile of the transaction. The acquisition multiple looks compelling once expected cost savings are considered, and management projects that the deal will boost Smithfield’s earnings per share right away. Importantly, Smithfield plans to finance the purchase entirely with existing cash, preserving balance sheet flexibility while still targeting meaningful annual cost synergies within two years of closing. In his view, the incremental revenue, synergy potential, and enhanced vertical integration position Smithfield for higher, more durable cash flows, supporting a valuation above the current share price and justifying his Buy rating and $29 price objective.
Galbo covers the Consumer Defensive sector, focusing on stocks such as Coca-Cola, Tyson Foods, and Hormel Foods. According to TipRanks, Galbo has an average return of -0.9% and a 46.09% success rate on recommended stocks.
In another report released today, Morgan Stanley also maintained a Buy rating on the stock with a $29.00 price target.