Shares in US poultry group Sanderson Farms increased 6.7% yesterday (19 November) after the stock was upgraded to “neutral” from “underweight”, according to reports.
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JPMorgan analyst Ken Goldman told media the “risk/reward calculus appears to be more balanced”, as chicken prices drop and investors prop up the company’s shares.
The analyst said that “now seems like a good time to be putting money into the poultry processor”, and with chicken prices at their lowers possible point, it allows for a “path to recovery”.
Sanderson’s stock traded up US$1.58, to close at $25.13 in New York.
Goldman said that Sanderson does not appear to be in danger of breaching its debt covenants, unlike other chicken processors, such as Pilgrim’s Pride.
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