In a report released today, Akshay Jagdale from Jefferies maintained a Sell rating on Sanderson Farms (NASDAQ: SAFM), with a price target of $77. The company’s shares closed yesterday at $106.21, close to its 52-week low of $95.97.
Jagdale said:
“3Q operating results were significantly weaker than expected – EBIT was ~43%/ ~46% below our/street estimate primarily driven by lower chicken commodity prices owing to weak demand. We attribute the demand weakness to an increase in availability of competing proteins (pork & beef), which we expect will continue to be the case. We expect chicken supply growth to outpace demand for at least the next 6-12 months & as such, we are maintaining our UP rating & 77 PT.”
According to TipRanks.com, Jagdale is a 4-star analyst with an average return of 4.1% and a 52.8% success rate. Jagdale covers the Consumer Goods sector, focusing on stocks such as Lamb Weston Holdings, McCormick & Company, and J & J Snack Foods.
The word on The Street in general, suggests a Hold analyst consensus rating for Sanderson Farms with a $98.20 average price target.
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Based on Sanderson Farms’ latest earnings release for the quarter ending July 31, the company reported a quarterly net profit of $11.31 million. In comparison, last year the company had a net profit of $114 million.
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Sanderson Farms, Inc. is a poultry processing company that engages in the production, processing, marketing and distribution of fresh, frozen, further processed and partially cooked chicken products. It operates through three divisions: Production, Processing, and Foods. The Production division refers to the production of chickens to the broiler stage.
