Adam Samuelson, an analyst from Goldman Sachs, maintained the Hold rating on Pilgrim’s Pride (PPC – Research Report). The associated price target was raised to $38.00.
Adam Samuelson’s rating is based on a nuanced analysis of Pilgrim’s Pride’s recent performance and market conditions. The hold rating reflects a balanced view, acknowledging the company’s first quarter earnings per share (EPS) that surpassed expectations, driven by strong margins in Mexico and the UK/Europe regions. These positive results were enough to counterbalance the slightly weaker-than-anticipated margins in the US. The domestic poultry market’s current robustness, due to limited supply growth and sustained demand, particularly from elevated red meat prices, is predicted to bolster Pilgrim’s Pride’s US operations in the short-term, specifically in the second and third quarters.
However, Samuelson suggests caution as the market looks towards the end of the year, noting the importance of monitoring forward supply indicators that could affect production rates and, consequently, year-over-year supply trends. This would especially be relevant for the fourth quarter, where seasonal production adjustments have the potential to introduce volatility. Furthermore, continued margin strength in the UK enhances confidence in Pilgrim’s Pride’s medium-term earnings prospects. These factors combined with the updated earnings estimates for the years 2024 to 2026, which reflect a positive adjustment based on the company’s near-term performance in the US and anticipated long-term improvements in the UK, have led to an increased price target. Nonetheless, the hold rating is maintained, suggesting that while the company is doing well, there may be limitations or uncertainties that prevent a more bullish recommendation at this time.
Samuelson covers the Consumer Defensive sector, focusing on stocks such as Pilgrim’s Pride, Cal-Maine Foods, and Darling Ingredients. According to TipRanks, Samuelson has an average return of 1.7% and a 42.38% success rate on recommended stocks.
In another report released on May 2, Barclays also maintained a Hold rating on the stock with a $38.00 price target.
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Pilgrim’s Pride (PPC) Company Description:
Pilgrim’s Pride Corp. is engaged in the production, processing, marketing and distribution of fresh, frozen, and value-added chicken products to retailers, distributors and foodservice operators. It operates through the following segments: U.S., U.K. & Europe and Mexico. The company was founded by Lonnie A. Pilgrim and Aubrey Pilgrim on October 2, 1946 and is headquartered in Greeley, CO.
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