Near-Term Conditions Bode Well for Pilgrim’s Pride’s Profits, but Earnings Volatility Remains

Even as the second-largest poultry producer in the US (58% of 2023 sales), the UK and Europe (30%), and Mexico (12%), we think Pilgrim’s Pride has failed to create a competitive advantage. Pilgrim’s Pride primarily sells fresh chicken and pork (only in Europe), with just 27% of Pilgrim’s Pride's sales coming from prepared products, though this includes private-label offerings. Because meat is a commodity and carries little to no brand or pricing power, it is exposed to volatility in both input costs and selling prices. We don’t think the diversification afforded through acquisitions into pork and Europe necessarily reduces that risk, given the limited revenue or cost synergies we see across proteins and regions.