Analyst Megan Alexander from Morgan Stanley maintained a Buy rating on Smithfield Foods and increased the price target to $30.00 from $29.00.
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Megan Alexander’s rating is based on several factors that highlight Smithfield Foods’ strong performance and future potential. Despite a recent dip in stock price, the company reported solid second-quarter results and raised its full-year guidance, which Alexander views as conservative, particularly in the hog production segment. The futures market suggests higher profitability than Smithfield’s current guidance, indicating potential upside.
Additionally, Smithfield’s ability to maintain strong packaged meats margins amidst raw material volatility demonstrates its resilience and potential for earnings growth. This performance, coupled with management’s optimistic outlook on hog prices and the company’s strategic execution, supports the Buy rating. Alexander believes that continued strong performance could enhance investor confidence and lead to a valuation more in line with industry peers, offering significant upside potential.
In another report released yesterday, Barclays also maintained a Buy rating on the stock with a $30.00 price target.