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Analyst slashes profit outlook for chicken producers
Story Date: 7/23/2012
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Source: MEATINGPLACE, 7/23/12
Stephens Inc. analyst Farha Aslam sharply reduced her profit forecasts for Sanderson Farms, Pilgrim’s Pride and Tyson Foods, citing higher grain costs and lackluster demand.
“The spike in grain costs and muted poultry demand will likely force the industry to further cut production for profits to recover,” Aslam wrote in a note to clients.
“Our view is that it will take 9-12 months for the chicken industry to return to normal profit levels,” she said.
She reduced her fiscal 2012 forecast for Sanderson’s earnings per share (EPS) to $1.40 from $3.60 previously.
For Pilgrim’s Pride, she lowered her fiscal 2012 outlook for operating EPS to 10 cents from 80 cents.
Aslam reduced her 2012 EPS forecast for Tyson Foods to $1.60 from $2.00.
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