Stephens cuts Cal-Maine Foods stock price target on weak egg market

Stephens cuts Cal-Maine Foods stock price target on weak egg market

US concludes third round of strikes against Iran after Trump reinstates blockade Investing.com - Stephens lowered its price target on Cal-Maine Foods stock (NASDAQ:CALM) to $85 from $90 while maintaining an Equal Weight rating on Monday. The stock currently trades at $83.41, and according to InvestingPro analysis, remains undervalued relative to its Fair Value estimate. The firm cited egg fundamentals trending at multi-year lows as a key factor in the price target reduction.

Egg markets face challenges from oversupply dynamics that could pressure earnings in the near term. Analysts forecast earnings per share to decline to $7.70 for fiscal 2026, down from $14.42 over the last twelve months, reflecting these market headwinds. Cal-Maine Foods has shifted roughly half of its conventional egg volumes toward hybrid pricing structures in recent years.

The company has pursued acquisitions including Creighton Brothers and Van Foods as part of its strategy to move up the egg value chain. The company previously stated it expects Prepared Foods volumes to increase by 30% over the next 18 to 24 months. Stephens estimates this figure could reach at least the mid-30% range given the recent acquisitions.

The firm noted Cal-Maine Foods has been working to smooth out volatility seen across conventional egg markets through its hybrid pricing strategy and prepared foods expansion. For deeper insights into CALM’s financial health and strategy, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro for this and 1,400+ other US equities. In other recent news, Cal-Maine Foods reported a significant decline in its financial performance for the third quarter of fiscal 2026, with earnings per share and EBITDA both decreasing by 90% compared to the previous year.

Despite this downturn, Benchmark has reiterated its Buy rating for the company, maintaining a price target of $100. The firm highlighted Cal-Maine’s strategic shift in its egg pricing structure, which could potentially benefit the company in a challenging commodity egg market. Additionally, Cal-Maine Foods has expanded its Board of Directors by appointing two new independent members, Haley R. Fisackerly and Michael J. Highfield, increasing the board size from eight to ten directors.

In a strategic move to enhance its product offerings, Cal-Maine Foods acquired the Van’s frozen waffle business from Sara Lee Frozen Bakery. This acquisition is expected to boost the company’s prepared foods sales by approximately 10% and volume by about 6% on a pro forma basis. These developments indicate Cal-Maine Foods’ efforts to navigate current market conditions and expand its business portfolio.