Stephens Downgrades Pilgrim's Pride (PPC) to Equal Weight

Stephens analyst Ben Bienvenu downgraded Pilgrim's Pride (NASDAQ: PPC) from Overweight to Equal Weight with a price target of $35.00.

The analyst comments "We have lowered our F4Q U.S. operating profit estimate due to lower chicken pricing. We are modeling pricing down 1.3% y/y, with improvement in big bird and medium bird, offset by a decline in small bird prices. Additionally, in big and medium-sized bird tenders, wings and leg quarters supported the cutout, however the boneless skinless breasts markets continue to be pressured. We are modeling feed up 1.6% y/y with higher corn prices more than offsetting lower soybean meal prices. Our F4Q Mexican operating profit expectation is essentially unchanged. Chicken prices were slightly higher than our prior expectations - according to the Mexican Secretary of the Economy, prices increased 11.2% y/y, albeit the year-ago period was an easier comp. Historically, prices from the Mexican Secretary of the Economy have had a ~75% correlation with Pilgrim's reported Mexican prices after factoring in exchange rates. Our F4Q European EBIT estimate remains unchanged. We have maintained our margin estimate as we expect the lag in the pass through of feed costs to be a positive tailwind during the quarter, partially offset by profit headwinds associated with the recently acquired Tulip, which management is in the process of turning around."

For an analyst ratings summary and ratings history on Pilgrim's Pride click here. For more ratings news on Pilgrim's Pride click here.

Shares of Pilgrim's Pride closed at $30.43 yesterday.

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