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Public poultry firms should see '21 earnings boost

Pilgrim’s Pride Corp., Sanderson Farms and Tyson Foods Inc. are poised to show improvements in fundamentals this year and higher prices for chicken, according to an industry analyst who also sees higher red meat prices helping boost poultry demand.

Stephens Inc. analyst Ben Bienvenu believes that higher grain prices this year will drive poultry production restraint in the near term, which will send chicken prices higher when improving demand is added to the mix this year. The chicken cutout should more than cover the higher feed costs as protein prices rally, Bienvenu noted in a report on protein prospects over the next 10 months. The expansion of foodservice growth as COVID-19 restrictions ease also should result in more pronounced pricing as orders from the foodservice channel accelerate, he adds.

The positive outlook prompted Bienvenu to increase his earnings estimates for fiscal 2021. He expects Pilgrim’s 2021 earnings to hold steady at $1.05 per share, Sanderson to hit $10.25 per share (vs. a projected loss of 40 cents) and Tyson to reach $5.96 a share (vs. $5.52). Sanderson’s per-share earnings in the second quarter of 2021 are projected to reach $3.01 (compared with the prior estimate of 32 cents) while Tyson should see $1.17 a share in the period (vs. 90 cents a share). Bienvenu did not report earnings estimates for Pilgrim’s Pride for the first three quarters of 2021.

By Chris Scott

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