Source: MEATINGPLACE, 2/4/16

BB&T Capital Markets analyst Brett Hundley says he is more confident that avian influenza will be less of a threat to broiler production this year, prompting him to boost his profit forecast for Sanderson Farms.

A recent outbreak in Indiana seemed well contained, said the analyst, and he thinks future cases are more likely to hit northern states rather than in the U.S. South, where broiler production is concentrated.

Export partners appear more willing to accept regional bans should more outbreaks occur, which will support pricing in the second half of the year, Hundley said.

He raised Sanderson’s 2016 profit forecast to $5.87 a share from $5.78 as a result.

“We are growing more comfortable with the idea that bird flu will not be a major impact on 2016 chicken industry results,” Hundley said in a note to clients.

But Hundley trimmed his forecast for Sanderson’s first-quarter earnings by 2 cents, to 20 cents a share, due to weaker-than-expected chicken pricing. Pricing has been improving, but the trend has stalled in recent days, which is not unusual, he noted.

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