Benzinga
Could Pilgrim’s Pride Be The Biggest Winner From McDonald’s Chicken Sandwich Launch?
Fast-food giant Mcdonald’s Corp (NYSE: MCD) launched its new premium chicken sandwich and the biggest winner could be chicken supplier Pilgrim’s Pride Corporation (NASDAQ: PPC), according to BofA Securities. The Pilgrim’s Pride Analyst: Peter Galbo maintains a Buy rating on Pilgrim’s Pride’s stock with an unchanged $25 price target. The Pilgrim’s Pride Thesis: McDonald’s entrance into the premium chicken sandwich war implies more than 50% of all quick-service restaurants feature a chicken sandwich on their menu, Galbo wrote in a note. The growing popularity of chicken sandwiches and continued adoption bodes well for chicken suppliers, especially Pilgrim’s Pride. Tyson Foods, Inc. (NYSE: TSN) is among the largest chicken suppliers to McDonald’s, but smaller-sized chickens are the preferred choice for sandwiches, the analyst wrote. Tyson’s exposure to smaller chickens accounts for around 20% of its total chicken portfolio compared to Pilgrim’s larger exposure at one-third of its U.S. capacity. Related Link: Yes, Even Taco Bell Is Entering The Chicken Sandwich Battle Pilgrim’s is also converting one of its large bird facilities to small bird to address the growing demand for smaller chickens. Finally, it has never been confirmed if Pilgrim’s supplies chicken to McDonald’s, but the company will benefit regardless from the chicken sandwich wars. PPC Price Action: Shares of Pilgrim’s Pride were trading higher by 1.4% Thursday morning at $22.81. (Photo by Daniel Tuttle on Unsplash) Latest Ratings for PPC DateFirmActionFromTo Feb 2021Stephens & Co.UpgradesEqual-WeightOverweight Oct 2020BarclaysUpgradesEqual-WeightOverweight Jun 2020BarclaysDowngradesOverweightEqual-Weight View More Analyst Ratings for PPC View the Latest Analyst Ratings See more from BenzingaClick here for options trades from BenzingaDomino’s, Papa John’s Deliver Disappointing Earnings: Here’s What HappenedSnapchat’s ‘Open-Ended Growth Story’ Solidified After Analyst Day Event© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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