Shares of Pilgrim's Pride Corp (NASDAQ:PPC) remained highly volatile in early trading on Tuesday.

The company is facing high demand for chicken from both full-service restaurants and fast-food chains due to beef shortages, according to Argus Research.

The Pilgrim's Pride Analyst: John Staszak initiated coverage of Pilgrim's Pride with a Buy rating and price target of $41.

The Pilgrim's Pride Thesis: The company should be able to generate low single-digit supply growth over the next five years, Staszak said in the initiation note.

Check out other analyst stock ratings.

Chicken sales could exceed sales of other proteins, like beef, pork and turkey, in mature markets, such as the U.S. and Europe, due to health-conscious consumers preferring chicken, the analyst stated. In emerging markets, chicken sales could be boosted by income growth, he added.

Following supply-chain headwinds in early 2023, Pilgrim's Pride is poised for margin expansion, Staszak said. "Pilgrim's Pride is planning to allocate its strong cash flow to growth initiatives and we expect it to exceed its capital expenditures guidance," he further wrote.

PPC Price Action: Shares of Pilgrim's Pride had risen by 1.6% to $35.30 at the time of publication on Tuesday.

Photo: Unsplash