Stephens & Co analyst Ben Bienvenu reiterated an Equal Weight rating on the shares of Cal-Maine Foods Inc (NASDAQ:CALM) and lowered the price target from $60 to $50.
The analyst has lowered Q4 adjusted EPS estimate to $2.12 from $2.85, driven primarily by lower-than-previously-expected egg prices, FY23 adjusted EPS to $15.32 from $16.05.
The analyst also cut FY24 adjusted EPS estimate to $4.20 from $4.88 due primarily to lower egg prices as well as higher than previously expected feed prices.
Cal-Maine has generated very strong cash flow for the last several years as a result of supportive S/D in the midst of widespread HPAI virus, said the analyst.
The analyst expects these conditions to ease considerably going forward, and with still elevated feed costs, the analyst anticipates significant moderation in earnings power and cash flow generation of the business over the next twelve months.
Despite higher egg prices and feed costs, the analyst believes the war chest of cash the company has built over the last year puts it in a position of strength as it navigates a shifting fundamental backdrop.
Price Action: CALM shares are trading lower by 2.30% at $45.02 on the last check Wednesday.
