Megan Alexander, an analyst from Morgan Stanley, maintained the Buy rating on Smithfield Foods (SFD – Research Report). The associated price target is $28.00.
Megan Alexander’s rating is based on a combination of factors that highlight both the challenges and opportunities for Smithfield Foods. Despite recent underperformance compared to its protein peers and broader market, largely due to concerns over tariffs from China, Mexico, and Canada, Alexander sees potential in the company’s valuation. The current market price seems to overly discount the risks associated with these tariffs while not fully appreciating the growth in Smithfield’s packaged meats segment and the positive outlook for hog production.
Furthermore, Smithfield’s strategic position, including its relationship with WH-Group, provides a competitive edge, particularly in exports to China where demand for offal products remains strong. The stock is trading at a lower multiple compared to its peers, suggesting it is undervalued. The upcoming 4Q earnings report is seen as a pivotal moment for Smithfield to build investor confidence, with management expected to address these concerns and highlight the company’s strengths and future prospects.
In another report released on March 21, Barclays also maintained a Buy rating on the stock with a $28.00 price target.
Based on the recent corporate insider activity of 30 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 SFD in relation to earlier this year.