Smithfield Foods selloff overdone, says Morgan Stanley

Morgan Stanley analyst Megan Alexander Clapp said that with Q4 results known, and FY25 guidance more or less in-line with expectations “against a low-bar,” the post-earnings selloff in Smithfield Foods (SFD) appears “overdone.” The firm attributes the reaction in part to broader market dynamics in addition to Smithfield’s limited float, though its also believes the company’s message on Q1 “may have been misconstrued by investors.” However, the firm, doesn’t think the company’s comments were meant to imply Street estimates for Q1 were too high, is taking Q1 estimates up slightly due to a better outlook for hog production and reiterates an Overweight rating and $28 price target on the shares.