Shares of fresh egg producer Cal-Maine Foods Inc (NASDAQ:CALM) tanked in early trading on Thursday, after the company reported mixed first-quarter results for fiscal 2027.
The company’s quarterly results were soft, with the industry remaining in the early stages of recovery, according to Stephens.
The Cal-Maine Foods Analyst: Analyst Pooran Sharma maintained an Equal-Weight rating and cut the price target from $80 to $70.
The Cal-Maine Foods Thesis: The company reported an adjusted loss of $1.23 per share, worse than consensus estimates of a loss of 77 cents per share, Sharma said in the note.
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He added that the earnings miss was due to:
- Lower gross margin
- Higher SG&A
- Lower other income
The analyst highlighted the following from Cal-Maine Foods’ latest print:
- Net sales declined by 41.5% to $539.6 million
- Company shell egg volumes contracted by 1.9% year-on-year
- Average selling price declined by 40.4% year-on-year to $1.48 per dozen
While volumes were higher than expected for specialty shell eggs, they were slightly lower for conventional, and pricing remained soft for both specialty and conventional eggs "due to industry supply imbalance," Sharma noted.
The company repurchased $5 million worth of shares during the quarter and has a further authorization of $315.7 million, the analyst stated.
"While we are encouraged with the initiatives CALM has undertaken to stabilize earnings, we are concerned with the current backdrop," he added, noting that egg prices are expected to remain muted even during the historically better holiday season, given the supply-demand dynamics.
CALM Price Action: Shares of Cal-Maine Foods had declined by 3.28% to $65.83 at the time of publication on Thursday.
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