Demand Spurs Pilgrim's Progress
Pilgrim's Pride should benefit from growing consumption of chicken domestically and abroad.
We believe Pilgrim’s Pride (PPC) allows investors to capitalize on strong protein and fresh food demand and rising meat consumption in Mexico. The no-moat firm is exposed to commodities, but we expect its balanced portfolio and growth in Mexico to act as a counterweight as inputs normalize. The shares are currently trading at an attractive discount to our $29 fair value estimate,
Even with ground beef prices falling, Pilgrim’s Pride should benefit from rising U.S. chicken consumption because of the meat’s price advantage and health perception. We see poultry taking share from beef in the long run, though short-term sales could be pressured as some consumers return to red meat and prices fall in step with beef.
Zain Akbari does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
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