Analyst Note| Rebecca Scheuneman, CFA |
The most important takeaway from no-moat Pilgrim’s Pride’s first quarter is that the recovery is tracking with our forecast, and we hold to our $33.50 fair value estimate. With the 2% drop on the report, shares offer over 25% upside and we recommend investors build positions. First-quarter sales grew 6.5% (on top of last year’s 1.1% organic growth) and adjusted operating margins increased 220 basis points to 4.9%, given higher selling prices. We remain comfortable with our fiscal 2021 forecast for 6.0% sales growth and 5.3% adjusted operating margins.