In a report released yesterday, Adam Samuelson from Goldman Sachs maintained Cal-Maine Foods (CALM – Research Report) to a Sell, with a price target of $39.00.
Adam Samuelson has given his Sell rating due to a combination of factors. Firstly, he observed that Cal-Maine Foods’ Q1 2024 earnings per share (EPS) came in slightly above Goldman Sachs’ expectations but notably below the consensus on FactSet. Despite stronger realized pricing and lower cost of goods sold (COGS) that surpassed a lower-than-expected egg production, the gross profit was above their forecast. However, this was partially offset by a decrease in selling, general and administrative expenses, and lower interest income at the EPS level.
Samuelson anticipates a more subdued operating performance in the forthcoming quarters, which is expected to shift investor focus to Cal-Maine Foods’ earnings power and return on equity (ROE) potential through the cycle, without the aid of external supply shocks. Given this outlook, he has modestly lowered his forecasts for the company’s EPS for the fiscal years 2024-26, and also reduced the price target from $40 to $39. Considering these factors, Samuelson decided to maintain his Sell rating on Cal-Maine Foods’ stock.
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Cal-Maine Foods (CALM) Company Description:
Cal-Maine Foods, Inc. engages in the production, grading, packing, marketing, and distribution of fresh shell eggs. The firm operates farms, processing plants, hatcheries, feed mills, warehouses, offices and other properties. It markets shell eggs to national and regional grocery store chains, club stores, foodservice distributors, and egg product manufacturers. The company was founded by Fred R. Adams Jr. in 1957 and is headquartered in Jackson, MS.
Read More on CALM:
- Cal Maine Foods options imply 4.5% move in share price post-earnings
- Options Volatility and Implied Earnings Moves Today, October 03, 2023
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- Cal-Maine Foods to acquire egg production assets from Fassio Egg Farms
