PPC
Pilgrim's Pride Corporation
$28.25
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 61.4% below fair value
You pay
$28.25
Bear
$60.20
Fair
$73.11
Bull
$86.00
Bear
$60.20
+113.1%
$4.79 × 15x P/E
Fair
$73.11
+158.8%
$4.79 × 18x P/E
Bull
$86.00
+204.4%
$4.79 × 21x P/E
Key Value Driver
Normalized P/E multiple (18x base case)
Implied Market Multiple
5.9x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $37.33 from 21 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $73.11 per share.
Warnings
The company pays out 373% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $37.33 (from 21 analysts). Our estimate is 128% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples