Smithfield Foods (NASDAQ:SFD) Shares Gap Down on Disappointing Earnings

Key Points

• Smithfield Foods shares opened significantly lower at $24.19 after the company reported quarterly earnings of $0.55 per share, missing the consensus estimate by $0.01.
• The company announced a quarterly dividend of $0.25 per share, with a yield of 4.0% and a payout ratio of 44.05%.
• Recent trading activity showed a 1.5% decrease in the firm's stock price, bringing its current price to $24.89.

Smithfield Foods, Inc. (NASDAQ:SFD - Get Free Report) shares gapped down before the market opened on Tuesday following a weaker than expected earnings announcement. The stock had previously closed at $25.17, but opened at $24.19. Smithfield Foods shares last traded at $24.89, with a volume of 210,559 shares.

The company reported $0.55 earnings per share for the quarter, missing the consensus estimate of $0.56 by ($0.01). The company had revenue of $3.79 billion during the quarter, compared to the consensus estimate of $3.62 billion. The company's quarterly revenue was up 11.0% compared to the same quarter last year.

Smithfield Foods Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, August 28th. Stockholders of record on Thursday, August 14th will be given a $0.25 dividend. This represents a $1.00 annualized dividend and a dividend yield of 4.0%. The ex-dividend date is Thursday, August 14th. Smithfield Foods's payout ratio is presently 44.05%.

Analyst Upgrades and Downgrades

Several brokerages have recently commented on SFD. Morgan Stanley set a $30.00 price objective on Smithfield Foods and gave the company an "overweight" rating in a research report on Wednesday. Barclays boosted their price objective on Smithfield Foods from $28.00 to $30.00 and gave the company an "overweight" rating in a research report on Wednesday. Finally, UBS Group restated a "buy" rating and issued a $28.50 price objective (up from $25.00) on shares of Smithfield Foods in a research report on Wednesday. One investment analyst has rated the stock with a hold rating, seven have given a buy rating and one has assigned a strong buy rating to the company. According to MarketBeat, the stock currently has an average rating of "Buy" and a consensus price target of $28.44.

Institutional Investors Weigh In On Smithfield Foods

Several large investors have recently made changes to their positions in the company. Raymond James Financial Inc. bought a new stake in shares of Smithfield Foods in the second quarter worth about $29,000. CWM LLC bought a new stake in shares of Smithfield Foods in the second quarter worth about $30,000. PNC Financial Services Group Inc. bought a new stake in shares of Smithfield Foods in the first quarter worth about $27,000. Amalgamated Bank bought a new stake in Smithfield Foods during the first quarter worth approximately $28,000. Finally, Pacer Advisors Inc. bought a new stake in Smithfield Foods during the first quarter worth approximately $34,000.

Smithfield Foods Stock Down 1.9%

The company has a 50 day simple moving average of $24.08 and a two-hundred day simple moving average of $22.12. The company has a market capitalization of $9.95 billion and a P/E ratio of 11.15.

About Smithfield Foods

Smithfield Foods, Inc produces and markets a variety of fresh meat and packaged meats products both domestically and internationally. The Company operates in four segments: Pork, Hog Production, International and Corporate, each of which consists of a number of subsidiaries, joint ventures and other investments.