Citing stabilizing fundamentals and a falling risk that the company will violate its debt covenants, equity analyst Ken Goldman of J.P. Morgan bumped his rating of the company's stock to "overweight" from "neutral."

"With corn having dropped to around $3.50 and futures markets calling for continued relative weakness, the grain should pose much less of a threat" than it did last year for livestock operations, Goldman wrote. "A steep decline in the price paid for this commodity will have a meaningful effect on Smithfield's profits."

Meanwhile, evidence indicates that supply is in line with a lower level of demand overall.

Based on the improving news coming out of the company since the meeting last week of the Consumer Analyst Group of New York, Goldman said he believed the stock will eventually trade at a higher price. Since the beginning of February, the stock price has dropped by about 42 percent, trading recently at $6.79.

At CAGNY, Goldman noted, Smithfield CFO Bo Manly was adamant that the company "will not blow our covenants," and the strength of his conviction, Goldman said, in turn boosted the analyst's confidence in the stock. Also, Smithfield could ultimately wind up replacing its convent-laden debt instruments with revolving credit agreements that have fewer restrictions, as Tyson recently did.

Still, the relative strength of the dollar continues to erode the export markets for proteins.

The stock, Goldman said, it not for short-term or skittish investors: "We cannot emphasize enough the risks involved with this name." But after two more poor quarters, the picture for Smithfield may be brighter.