KeyBanc Starts Sanderson Farms (SAFM) at Sector Weight
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KeyBanc initiated coverage on Sanderson Farms (NASDAQ: SAFM) with a Sector Weight rating.
Analyst Brett Andress said, "Although we view SAFM as a well managed, growth-oriented processor (increasing its capacity 70%+ over the last decade), we view valuation at current levels as fair, with the stock currently trading at 13.4x our normalized earnings estimate vs. a range of 12-13x that we believe is more representative of a typical mid-cycle multiple. Further, we would highlight that SAFM has outsized exposure to Georgia Dock pricing (~25% vs. 3-5% for peers), likely creating a sentiment overhang given headlines surrounding this scrutinized pricing mechanism."
Shares of Sanderson Farms closed at $80.65 yesterday.
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