Morgan Joseph Starts Smithfield Foods (SFD) at Hold, Maybe Not The Best Time To Buy
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Price: $25.59 -0.89%
Rating Summary:
8 Buy, 8 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 20 | Down: 41 | New: 13
Rating Summary:
8 Buy, 8 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 20 | Down: 41 | New: 13
Trade SFD Now!
Morgan Joseph initiates coverage on shares of Smithfield Foods (NYSE: SFD) with a Hold rating as they are waiting for a more attractive opportunity/price to jump in.
The firm believes that the company will see its best year for earnings in history in 2011. This will largely be driven by stronger operating efficiencies and better pricing, which Morgan Joseph believes will last for a long time.
With the overall volume of Hogs going to the slaughter decreasing, SFD should experience experience stronger Hog prices, but is expected to be mostly offset by a steep increase in corn and soybean meal prices, corn is currently up 91% year over year. The company should see positive growth opportunities throughout 2011 in their international markets as demand continues to increase and volumes lower slightly.
Morgan Joseph comments that with shares currently trading at 7.3x their 2011 EPS estimate, they may seem to be a little undervalued; but the firm anticipates that their earnings will decline next year and states that, "in our opinion, rarely is it a good idea to buy a cyclical stock in front of an anticipated decline in earnings"
The firms 2011 and 2012 EPS estimates are $2.90 and $2.00 with revenue estimates of $12,343 million and $13,415 million.
For more ratings news on Smithfield Foods click here and for the rating history of Smithfield Foods click here.
Shares of Smithfield Foods closed at $21.30 yesterday, with a 52 week range of $13.34-$23.64.
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The firm believes that the company will see its best year for earnings in history in 2011. This will largely be driven by stronger operating efficiencies and better pricing, which Morgan Joseph believes will last for a long time.
With the overall volume of Hogs going to the slaughter decreasing, SFD should experience experience stronger Hog prices, but is expected to be mostly offset by a steep increase in corn and soybean meal prices, corn is currently up 91% year over year. The company should see positive growth opportunities throughout 2011 in their international markets as demand continues to increase and volumes lower slightly.
Morgan Joseph comments that with shares currently trading at 7.3x their 2011 EPS estimate, they may seem to be a little undervalued; but the firm anticipates that their earnings will decline next year and states that, "in our opinion, rarely is it a good idea to buy a cyclical stock in front of an anticipated decline in earnings"
The firms 2011 and 2012 EPS estimates are $2.90 and $2.00 with revenue estimates of $12,343 million and $13,415 million.
For more ratings news on Smithfield Foods click here and for the rating history of Smithfield Foods click here.
Shares of Smithfield Foods closed at $21.30 yesterday, with a 52 week range of $13.34-$23.64.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
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