Smithfield Foods (NASDAQ:SFD) Sets New 1-Year Low - What's Next?

Key Points

• Smithfield Foods shares fell to a new 52-week low of $18.80, below both their 50-day moving average of $22.57 and 200-day moving average of $24.87.
• Analyst sentiment is mixed: the consensus rating is “Hold” with a $29.20 price target, although several firms maintain Buy or Overweight ratings while recently lowering targets.
• The company remains income-oriented, paying a quarterly dividend of $0.3125, or $1.25 annually for a 6.6% yield. Its latest quarterly EPS of $0.62 exceeded estimates, but revenue declined 2.3% year over year.

Shares of Smithfield Foods, Inc. (NASDAQ:SFD - Get Free Report) reached a new 52-week low during mid-day trading on Wednesday. The company traded as low as $18.80 and last traded at $18.8470, with a volume of 317192 shares trading hands. The stock had previously closed at $19.01.

Wall Street Analyst Weigh In

Several research firms recently weighed in on SFD. Stephens began coverage on Smithfield Foods in a research report on Wednesday. They set an "equal weight" rating and a $22.00 price objective for the company. Barclays cut their price target on Smithfield Foods from $31.00 to $29.00 and set an "overweight" rating for the company in a report on Wednesday, September 9th. Bank of America reduced their price objective on Smithfield Foods from $33.00 to $32.00 and set a "buy" rating for the company in a research report on Thursday, July 2nd. The Goldman Sachs Group restated a "buy" rating and issued a $32.00 price objective on shares of Smithfield Foods in a research note on Wednesday, August 12th. Finally, Weiss Ratings downgraded shares of Smithfield Foods from a "buy (b-)" rating to a "hold (c+)" rating in a research note on Thursday, September 17th. Four equities research analysts have rated the stock with a Buy rating, two have given a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat, the stock has an average rating of "Hold" and a consensus price target of $29.20.

Smithfield Foods Price Performance

The company has a market cap of $7.44 billion, a P/E ratio of 7.05 and a beta of -0.51. The stock has a 50-day simple moving average of $22.57 and a 200 day simple moving average of $24.87. The company has a debt-to-equity ratio of 0.20, a quick ratio of 1.34 and a current ratio of 2.56.

Smithfield Foods (NASDAQ:SFD - Get Free Report) last released its quarterly earnings data on Tuesday, August 11th. The company reported $0.62 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.60 by $0.02. The business had revenue of $3.70 billion for the quarter. Smithfield Foods had a return on equity of 15.55% and a net margin of 6.84%.The business's revenue for the quarter was down 2.3% on a year-over-year basis. During the same quarter in the prior year, the firm posted $0.55 earnings per share. On average, equities analysts expect that Smithfield Foods, Inc. will post 2.12 EPS for the current year.

Smithfield Foods Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Thursday, August 27th. Shareholders of record on Thursday, August 13th were issued a $0.3125 dividend. This represents a $1.25 annualized dividend and a yield of 6.6%. The ex-dividend date of this dividend was Thursday, August 13th. Smithfield Foods's payout ratio is 46.64%.

Hedge Funds Weigh In On Smithfield Foods

A number of hedge funds and other institutional investors have recently made changes to their positions in the business. Bank of America Corp DE bought a new stake in shares of Smithfield Foods in the 2nd quarter worth about $19,855,000. BlackRock Inc. bought a new position in Smithfield Foods during the 2nd quarter valued at about $33,145,000. Core Capital Management & Research inc. bought a new position in Smithfield Foods during the 2nd quarter valued at about $6,656,000. Global Retirement Partners LLC acquired a new position in Smithfield Foods in the second quarter valued at about $1,815,000. Finally, Assenagon Asset Management S.A. acquired a new position in Smithfield Foods in the second quarter valued at about $18,975,000.

About Smithfield Foods

Smithfield Foods, Inc is a vertically integrated food company focused on pork production and packaged meats. Its operations include raising livestock, processing and packaging pork, and distributing fresh pork and prepared foods. The company's products include bacon, ham, sausage, hot dogs, lunch meats, fresh pork cuts and other refrigerated and shelf-stable meat products.

Smithfield markets products under brands including Smithfield, Eckrich, Farmland, Nathan's Famous and Healthy Ones, as well as private-label offerings for retailers and food-service customers.

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