Smithfield Foods (SFD) AI Stock Analysis

• Market Cap: $9.47B
• Dividend Yield: 3.21%
• Average Volume (3M): 1.65M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.45
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 36,500
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Agricultural Farm Products
• EPS (TTM): 0.55
• Shares Outstanding: 393,112,700
• 10 Day Avg. Volume: 1,395,546
• 30 Day Avg. Volume: 1,647,263
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.14
• Enterprise Value/Revenue: 0.94
• Enterprise Value/Gross Profit: 6.89
• Enterprise Value/Ebitda: 9.36
• 1Y Price Target: $29.75
• Price Target Upside: 26.06% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 71 Outperform
• Price Target: $28.00 ▲(18.64% Upside)

Smithfield Foods' overall score is driven by strong earnings performance and positive technical indicators. The company's ability to improve profitability and raise guidance despite external challenges is a key strength. However, declining revenue and valuation uncertainties slightly temper the outlook.

Positive Factors

Improved Profitability

The significant improvement in operating profit and margins reflects strong operational efficiency and strategic execution, enhancing long-term profitability.

Strong Cash Flow Management

Strong cash flow generation indicates effective financial management and provides flexibility for future investments and debt servicing.

Product Innovation

Product innovation and a shift towards higher-margin categories can drive revenue growth and improve competitive positioning in the long term.

Negative Factors

Declining Revenue

A declining revenue trend poses challenges to growth and may impact the company’s ability to sustain profitability if not addressed.

High Raw Material Costs

Rising raw material costs can erode profit margins, requiring the company to manage costs effectively to maintain profitability.

Tariff and Geopolitical Challenges

Geopolitical challenges and tariffs can disrupt supply chains and impact export markets, potentially affecting long-term revenue streams.

Smithfield Foods Business Overview & Revenue Model

Company Description

Smithfield Foods, Inc. manufactures and markets packaged meats and fresh pork in the United States and internationally. Its Packaged Meats segment processes fresh meat into various packaged meats products, including bacon, sausage, hot dogs, deli and lunch meats, dry sausage products, ham products, ready-to-eat products, and prepared foods, such as pre-cooked entrees, bacon, and sausage to retail and foodservice customers in the United States. This segment markets its packaged meats products under the Smithfield, Eckrich, Nathan's Famous, Farmland, Armour, Farmer John, Kretschmar, Krakus, John Morrell, Cook's, Gwaltney, Carando, Margherita, Curly's, and Smithfield Culinary brands, as well as under private labels. The company's Fresh Pork segment process live hogs into a variety of primal, sub-primal, and offal products, such as bellies, butts, hams, loins, picnics, and ribs. This segment sells its fresh pork products to retail, foodservice and industrial customers, as well as to export markets, including China, Mexico, Japan, South Korea, and Canada. Its Hog Production segment produces and raises its hogs on various company-owned farms and farms that are owned and operated by third-party contract farmers in the United States and Mexico. The Hog Production segment also sells grains to external customers. The company's bioscience operations use raw materials from hogs that process to manufacture heparin products, including an active pharmaceutical ingredient that mitigates the risk of blood clots. The company was founded in 1936 and is based in Smithfield, Virginia. Smithfield Foods, Inc. is a subsidiary of SFDS UK Holdings Limited.

How the Company Makes Money

Smithfield Foods makes money primarily through the sale of its pork and packaged meat products. The company's revenue streams include fresh pork, which involves the processing and sale of pork cuts and by-products, and packaged meats, which encompass branded and private label processed products such as bacon, ham, and sausages. These products are sold through retail channels, including supermarkets and grocery stores, and through food service providers. Smithfield Foods leverages its extensive supply chain, from hog production to processing and distribution, to optimize efficiency and reduce costs. Additionally, the company benefits from strategic partnerships and exports, expanding its market reach and enhancing profitability.

Smithfield Foods Financial Statement Overview

Summary

Smithfield Foods showed resilience with improved profitability and strong cash flows despite a decline in revenue. The balance sheet is solid with manageable leverage, but the reduction in total assets and potential revenue impact are concerns. Continued focus on efficiency is crucial.

Income Statement

Smithfield Foods demonstrated a recovery in profitability over the past year, with an impressive increase in gross profit and EBIT margins from a challenging previous year. The gross profit margin improved significantly to 13.42%. However, revenue has seen a decline from $16.2 billion in 2022 to $14.14 billion in 2024, indicating a negative growth trend. The net profit margin also improved to 6.74%, highlighting better cost management. Overall, the company is showing stabilization after a turbulent year, but declining revenue is a concern.

Balance Sheet

The balance sheet of Smithfield Foods is solid with a moderate debt-to-equity ratio of 0.40, indicating manageable leverage levels. The equity ratio stands at 52.78%, suggesting a strong equity base relative to total assets. Return on equity (ROE) improved to 16.33%, reflecting enhanced profitability and efficient use of equity. The company's financial stability is evident, but the reduction in total assets over the years is noteworthy.

Cash Flow

Smithfield Foods shows robust cash flow metrics with an improvement in free cash flow and operating cash flow. The operating cash flow to net income ratio is 1.19, indicating healthy cash generation relative to reported earnings. Free cash flow has grown, but the free cash flow to net income ratio of 0.83 suggests room for improvement in cash conversion. Overall, cash flow management appears strong, but potential for better efficiency exists.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022
Income Statement
Total Revenue	11.53B	14.14B	14.64B	16.20B
Gross Profit	1.57B	1.85B	1.09B	1.65B
EBITDA	1.15B	1.36B	604.00M	1.20B
Net Income	616.00M	953.00M	17.00M	870.00M
Balance Sheet
Total Assets	11.19B	11.05B	13.32B	13.85B
Cash, Cash Equivalents and Short-Term Investments	928.00M	943.00M	687.00M	547.00M
Total Debt	2.66B	2.36B	2.46B	2.47B
Total Liabilities	4.88B	5.00B	5.83B	6.28B
Stockholders Equity	6.30B	5.83B	7.24B	7.37B
Cash Flow
Free Cash Flow	551.00M	787.00M	681.00M	179.00M
Operating Cash Flow	791.00M	1.14B	1.03B	517.00M
Investing Cash Flow	-151.00M	-469.00M	-322.00M	193.00M
Financing Cash Flow	-31.00M	-464.00M	-533.00M	-477.00M

Smithfield Foods Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CALM	84 Outperform	4.77B	3.91	―	8.45%	83.19%	339.22%
ADM	77 Outperform	29.12B	26.88	8.12%	3.35%	-6.70%	-54.38%
BG	72 Outperform	16.40B	7.93	12.66%	3.37%	-8.87%	13.21%
SFD	71 Outperform	$9.47B	―	―	3.21%	―	―
FDP	71 Outperform	1.68B	11.00	7.30%	3.28%	1.41%	―
TSN	66 Neutral	18.90B	23.89	4.35%	3.69%	1.99%	―
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%

Smithfield Foods Corporate Events

Smithfield Foods Amends Credit Agreements for Liquidity

On July 22, 2025, Smithfield Foods, Inc. and its subsidiaries amended and restated their credit and receivables agreements, removing the monetization component of their financial facility. This decision was made due to the company’s strong liquidity position, rendering the monetization component unnecessary, and was executed without incurring any early termination penalties or material exit costs.

Smithfield Foods Elects Directors at Annual Meeting

On June 3, 2025, Smithfield Foods held its Annual Meeting of Shareholders where all three director nominees were elected to the Board of Directors. Shareholders also ratified the appointment of Ernst & Young LLP as the independent registered public accounting firm for 2025, approved executive compensation for 2024, and decided on an annual advisory vote on executive compensation.