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Pilgrims Pride Corp PPC

Morningstar Rating
$34.87 −0.14 (0.40%)
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Company Report

Pilgrim’s Pride Has Done a Good Job Optimizing Performance but Still Vulnerable to Volatility

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 synergies we see across proteins and regions.

Price vs Fair Value

PPC is trading at a 458% premium.
Price
$34.87
Fair Value
$39.00
Uncertainty
High
1-Star Price
$88.50
5-Star Price
$77.80
Economic Moat
Zhyg
Capital Allocation
Drrffjpf

Bulls Say, Bears Say

Bulls

As the second-largest producer, Pilgrim's should benefit from US health trends that favor chicken consumption in lieu of beef and pork.

Bears

Food is a competitive space, and Pilgrim’s Pride's undifferentiated commodity portfolio lacks brand power and faces constant price competition.

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News

Trading Information

Previous Close Price
$35.01
Day Range
$34.5335.16
52-Week Range
$19.9639.00
Bid/Ask
$34.65 / $35.23
Market Cap
$8.26 Bil
Volume/Avg
524,680 / 652,902

Key Statistics

Price/Earnings (Normalized)
14.74
Price/Sales
0.47
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

Pilgrim’s Pride is the second-largest poultry producer in the US (58% of 2023 sales), the UK (30% including other European sales), and Mexico (12%). Its UK and European arm also includes pork operations from the 2019 acquisition of Tulip. Pilgrim's sells to chain restaurants, food processors, food distributors, and retail chains. Most of its US and Mexican sales come from fresh chicken, while prepared chicken and pork constitute most of its UK and European sales. JBS owns more than 80% of Pilgrim’s Pride's outstanding shares, though it failed to acquire the remaining stake in 2021 after a special board committee deemed JBS’ offer undervalued Pilgrim’s Pride.
Sector
Consumer Defensive
Industry
Packaged Foods
Stock Style Box
Small Core
Total Number of Employees
61,200

Competitors

Valuation

Metric
PPC
00288
HRL
Price/Earnings (Normalized)
14.7416.6520.41
Price/Book Value
2.380.862.13
Price/Sales
0.470.321.40
Price/Cash Flow
8.185.2614.37
Price/Earnings
PPC
00288
HRL

Financial Strength

Metric
PPC
00288
HRL
Quick Ratio
0.910.650.97
Current Ratio
1.831.641.73
Interest Coverage
3.7510.3413.34
Quick Ratio
PPC
00288
HRL

Profitability

Metric
PPC
00288
HRL
Return on Assets (Normalized)
5.65%3.13%6.50%
Return on Equity (Normalized)
17.36%6.26%11.35%
Return on Invested Capital (Normalized)
9.83%4.90%8.17%
Return on Assets
PPC
00288
HRL
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