We have slightly lowered our fair value estimate for Pilgrim's Pride (PPC) to incorporate a tempered sales growth forecast and lower U.S. gross margin expectations in light of the competitive headwinds that we expect will plague the company’s business prospects. Despite this, we view the shares as attractive, trading more than 40% below our fair value estimate.
Even though Pilgrim’s Pride is the second-largest poultry producer in the United States (68% of revenue) and Mexico (12%), with the remainder of sales from Europe following the 2017 deal for Moy Park, we don’t believe it has carved out an edge.
Rebecca Scheuneman, CFA does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.