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Analysts to boost Pilgrim’s estimates on solid Mexico performance
Story Date: 5/2/2012
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Source: Chris Scott, MEATINGPLACE, 5/1/12
Positive news south of the border prompted two analysts to upgrade Pilgrim’s Pride stock and project higher annual earnings after first-quarter results exceeded expectations.
Ken Goldman at BMO Capital Markets wrote in a note to investors he believes Pilgrim’s is better equipped to navigate a volatile environment for commodities while also capitalizing on the recovery in chicken margins thanks to its improved cost structure.
Impressive results in Mexico – operating margins of 11 percent in the quarter – may not be sustainable, but Goldman raised projections for fiscal 2012 and 2013 to 80 cents a share (up from 68 cents) and 79 cents (up from 71 cents), respectively.
Meanwhile, Stephens Inc. analyst Farha Aslam raised her projections for Pilgrim’s fiscal 2012 earnings to 70 cents a share from 65 cents while citing the capital structure, the results in Mexico and a cost-cutting plan that’s ahead of schedule.
She maintained the estimate for fiscal 2013 earnings at 85 cents a share. Aslam adds that although the U.S. business is slower than she anticipated, Pilgrim’s overall still is outperforming the cost savings target.
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