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Pilgrim's Pride (PPC)
NASDAQ:PPC
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Pilgrim's Pride
(NASDAQ:PPC)
Rating:75Outperform
Price Target:
$53.00
▲( 6.85% Upside)
Positive Factors
Dividends
PPC announced a $1.5bn special dividend, signaling financial strength and a commitment to returning value to shareholders.
Growth Strategy
PPC has plans for geographic expansion and business integration, which are expected to drive growth and enhance margins.
Negative Factors
Margin Risks
US chicken margins may lag in future due to stronger production growth in shoulder periods.
Seasonality Risks
Analyst sees near-term risk from seasonality and accelerating production indicators.
Pilgrim's Pride (PPC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.76B
Dividend YieldN/A
Average Volume (3M)1.32M
Price to Earnings (P/E)9.8
Beta (1Y)0.27
Revenue Growth2.35%
EPS Growth145.82%
CountryUS
Employees62,600
SectorConsumer Defensive
Sector Strength76
IndustryPackaged Foods
Share Statistics
EPS (TTM)1.31
Shares Outstanding237,123,060
10 Day Avg. Volume1,258,602
30 Day Avg. Volume1,323,463
Financial Highlights & Ratios
PEG Ratio0.82
Price to Book (P/B)3.53
Price to Sales (P/S)0.00
P/FCF Ratio8.02
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$51.25Price Target Upside3.33% Upside
Rating ConsensusHold
Number of Analyst Covering4
Pilgrim's Pride Business Overview & Revenue Model
Company DescriptionPilgrim's Pride Corporation (PPC) is one of the largest poultry producers globally, operating primarily in the United States, Mexico, and the United Kingdom. The company is involved in the production, processing, marketing, and distribution of fresh, frozen, and value-added chicken and pork products. Pilgrim's Pride offers a diverse range of products, including whole and cut-up chicken, chicken breast, chicken wings, and ready-to-cook and fully-cooked chicken products, catering to retail, foodservice, and institutional markets.
How the Company Makes MoneyPilgrim's Pride generates revenue primarily through the sale of its poultry and pork products. The company's revenue streams are diversified across multiple channels, including retail sales to grocery chains, wholesale distribution to foodservice providers, and direct sales to restaurants and other culinary institutions. Pilgrim's Pride also engages in strategic partnerships and contracts with major retailers and foodservice companies, which help secure consistent demand and pricing stability. Additionally, the company benefits from its vertically integrated operations, which allow for greater control over production costs and supply chain efficiencies, thereby enhancing its profitability.
Pilgrim's Pride Financial Statement Overview
Summary
Pilgrim's Pride demonstrates a strong financial position with significant revenue growth, improved profit margins, and robust cash flow generation capabilities. The balance sheet shows low leverage, though reliance on liabilities for asset financing could be a concern.Income Statement
Pilgrim's Pride has shown strong revenue growth with a 49% increase over five years, reaching $17.98B in TTM. The Gross Profit Margin improved significantly to 13.81% in TTM, indicating enhanced operational efficiency. Net Profit Margin also increased to 6.72% in TTM, showcasing robust profitability. The EBIT Margin and EBITDA Margin are healthy, at 9.24% and 11.35% respectively, reflecting solid earnings performance.85
Very Positive
Balance Sheet
The company's balance sheet is stable, with a Debt-to-Equity Ratio of 0.06 in TTM, significantly reduced from prior years, indicating low leverage. The Return on Equity (ROE) improved to 38.56%, reflecting strong shareholder returns. However, the Equity Ratio is at a moderate 28.57%, suggesting potential reliance on liabilities for asset financing.75
Positive
Cash Flow
Pilgrim's Pride's free cash flow growth is strong, with a TTM figure of $1.48B. The Operating Cash Flow to Net Income Ratio is 1.53, indicating efficient cash conversion. The Free Cash Flow to Net Income Ratio is 1.22, demonstrating effective cash flow management and ability to support operations and investments.80
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 17.98B | 17.88B | 17.36B | 17.47B | 14.78B | 12.09B | Gross Profit |
| 2.48B | 2.31B | 1.12B | 1.81B | 1.37B | 838.20M | EBIT |
| 1.66B | 1.51B | 522.29M | 1.18B | 211.16M | 245.46M | EBITDA |
| 2.04B | 2.01B | 987.39M | 1.64B | 597.79M | 582.69M | Net Income Common Stockholders |
| 1.21B | 1.09B | 321.57M | 745.93M | 31.00M | 94.76M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.07B | 2.05B | 731.22M | 400.99M | 427.66M | 547.62M | Total Assets |
| 10.96B | 10.65B | 9.81B | 9.26B | 8.91B | 7.47B | Total Debt |
| 3.45B | 3.47B | 3.61B | 3.42B | 3.49B | 2.57B | Net Debt |
| 1.38B | 1.43B | 2.92B | 3.02B | 3.06B | 2.02B | Total Liabilities |
| 7.82B | 6.40B | 6.47B | 6.40B | 6.32B | 4.90B | Stockholders Equity |
| 3.13B | 4.24B | 3.33B | 2.84B | 2.58B | 2.56B |
| Cash Flow | Free Cash Flow | ||||
| 1.38B | 1.51B | 134.06M | 182.75M | -55.21M | 369.49M | Operating Cash Flow |
| 1.85B | 1.99B | 677.88M | 669.86M | 326.46M | 724.25M | Investing Cash Flow |
| -451.67M | -460.80M | -503.35M | -445.25M | -1.32B | -327.00M | Financing Cash Flow |
| -155.74M | -150.91M | 116.73M | -232.01M | 901.31M | -136.71M |
Pilgrim's Pride Technical Analysis
Positive
49.60
Price Trends
49.12
Positive
46.50
Positive
44.05
Positive
Market Momentum
-0.12
Negative
51.81
Neutral
73.18
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PPC, the sentiment is Positive. The current price of 49.6 is above the 20-day moving average (MA) of 48.68, above the 50-day MA of 49.12, and above the 200-day MA of 44.05, indicating a bullish trend. The MACD of -0.12 indicates Negative momentum. The RSI at 51.81 is Neutral, neither overbought nor oversold. The STOCH value of 73.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PPC.
Pilgrim's Pride Risk Analysis
Pilgrim's Pride disclosed 25 risk factors in its most recent earnings report. Pilgrim's Pride reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
We are subject to reputational risk in connection with U.S. and Brazilian civil and criminal actions and investigations involving our ultimate controlling shareholders, and these actions may materially adversely impact our business and prospects and damage our reputation and image. Q4, 2024
Pilgrim's Pride Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $6.33B | 8.85 | 23.47% | 2.36% | 3.82% | ― | |
75 Outperform | $11.76B | 9.77 | 36.53% | ― | 2.35% | 145.82% | |
70 Outperform | $7.83B | 28.78 | -190.65% | ― | 18.91% | 49.43% | |
68 Neutral | $10.69B | 32.78 | 3.67% | 6.25% | -3.15% | -65.38% | |
66 Neutral | $16.19B | 21.37 | 9.54% | 3.89% | -1.84% | -5.14% | |
65 Neutral | $8.84B | 14.90 | 4.69% | 203.33% | 3.49% | -1.84% | |
58 Neutral | $11.99B | 22.22 | -3.55% | 3.82% | 7.07% | -181.54% |
* Consumer Defensive Sector Average
Performance Comparison
PPC
Pilgrim's Pride
49.60
17.61
55.05%
BRFS
BRF SA
3.70
0.03
0.82%
CAG
Conagra Brands
22.40
-5.83
-20.65%
HRL
Hormel Foods
29.44
-3.98
-11.91%
SJM
JM Smucker
112.64
8.29
7.94%
BRBR
BellRing Brands
61.68
3.92
6.79%
Pilgrim's Pride Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: -9.12%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Positive
The earnings call reflected a positive sentiment with strong growth in revenue, EBITDA, and market expansion in the U.S., Europe, and Mexico. However, challenges remain in export markets, production efficiency, and SG&A costs.Q1-2025 Updates
Positive Updates
Increased Revenue and EBITDA
Net revenues for Q1 2025 were $4.5 billion, a 2.3% increase over the same quarter last year. Adjusted EBITDA was $533 million, up 62% compared to Q1 2024.
Expansion in Prepared Foods
Prepared foods grew over 20% compared to the prior year with increased distribution across retail and food services. Sales of Just BARE and Pilgrim's collectively rose over 50%.
Strong U.S. Market Performance
U.S. sales and adjusted EBITDA increased compared to the prior year. U.S. net revenues were $2.74 billion, a 6.2% increase from last year.
European Business Growth
Adjusted EBITDA margins in Europe improved to 8.1% from 6.4% last year due to integration and optimization efforts.
Expansion in Mexico
Sales to key customers in Mexico increased by 11%. The branded portfolio grew by 15% in Fresh and 9% in Prepared.
Negative Updates
Challenges in Export Markets
Winter weather port disruptions in January, potential port strikes, and increased domestic demand for dark meat reduced export volumes. The relationship with China remains in transition, affecting exports.
Mortality and Hatchability Issues
Increased mortality and reduced hatchability continue to challenge broiler production, requiring record high hatcher utilization.
Mexico Currency Impact
The increase in the exchange rate between the peso and the dollar negatively impacted Mexico's costs, resulting in a $8.5 million FX impact.
SG&A Costs
SG&A in the quarter was higher year-over-year, primarily due to an increase in legal settlement and defense costs and increased incentive compensation costs.
Company Guidance
During the first quarter of 2025, Pilgrim's Pride reported net revenues of $4.5 billion, marking a 2.3% increase from the prior year. The company achieved an adjusted EBITDA of $533 million, up 62% from Q1 2024, with an adjusted EBITDA margin of 12%, compared to 8.5% previously. In the U.S., adjusted EBITDA margins rose to 14.3% from 9.4% last year, reflecting improved sales and operational efficiencies. European operations saw adjusted EBITDA margins improve to 8.1% from 6.4%, attributed to business integration and manufacturing optimization. In Mexico, despite a slight decline in adjusted EBITDA margins to 8.4% from 9.2% due to currency impacts, the business showed sequential improvement. The company continues to focus on strategic growth, with planned investments in expanding its production capacity and enhancing its product offerings, while maintaining strong liquidity with over $1.6 billion in total cash and available credit.Pilgrim's Pride Corporate Events
Executive/Board ChangesShareholder Meetings
Pilgrim’s Pride Stockholders Approve Key Proposals at Meeting
Neutral
May 1, 2025
On April 30, 2025, Pilgrim’s Pride Corporation held its Annual Meeting where stockholders approved several key proposals, including the election of ten directors to the Board, an advisory vote on executive compensation, the ratification of KPMG LLP as the independent registered public accounting firm for the fiscal year ending December 28, 2025, and the approval of the Amended and Restated 2019 Long Term Incentive Plan. These decisions are expected to impact the company’s governance and financial oversight, aligning executive compensation with shareholder interests and ensuring continuity in financial auditing.
Business Operations and StrategyFinancial Disclosures
Pilgrim’s Pride Reports Strong Q1 2025 Financial Results
Positive
May 1, 2025
In its financial results for the first quarter ended March 30, 2025, Pilgrim’s Pride Corporation reported a significant year-over-year increase in net revenue and gross profit, driven by higher commodity market pricing and operational efficiencies. The company experienced growth in the U.S. and Europe, although profitability in Mexico declined due to foreign currency impacts. The results reflect improved operating income and adjusted EBITDA, with notable increases in the Big Bird business and key customer growth. However, the company faced higher SG&A expenses due to legal and incentive compensation costs, and the broiler layer flock decreased by 2.3% year-over-year.
Dividends
Pilgrim’s Pride Declares $6.30 Dividend Per Share
Positive
Mar 14, 2025
On March 13, 2025, Pilgrim’s Pride Corporation’s Board of Directors declared a dividend of $6.30 per share, payable to stockholders on April 3, 2025. The announcement, made on March 14, 2025, reflects the company’s commitment to returning value to its shareholders, potentially enhancing its market position and stakeholder confidence.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.