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Investing.com - Stephens has raised its price target on Cal-Maine Foods (NASDAQ:CALM) to $108.00 from $97.00 while maintaining an Equal Weight rating on the stock. The $5 billion market cap company, currently trading at a P/E ratio of 5.02, offers an impressive 13.71% dividend yield.
The firm cited healthy egg fundamentals supported by limited supplies and stronger-than-usual summer demand. Typically, warmer weather reduces egg consumption as consumers shift to grilling season, but this year demand has improved counter-seasonally. According to InvestingPro, Cal-Maine’s financial health score is rated as "Excellent" at 4.05, with analysts expecting continued net income growth this year.
Stephens noted that buyers are finding value at current price points compared to the $8 per dozen levels seen last quarter. Simultaneously, ongoing High Pathogenic Avian Influenza (HPAI) pressures, though less severe than December-February, are helping maintain a higher price floor throughout the summer.
The firm indicated that the industry remains far from a viable solution to HPAI, with cases affecting approximately 5 million layers already reported this spring. This situation creates what Stephens describes as a "constructive setup" for the egg market over the next few quarters.
Despite the positive industry backdrop, Stephens maintained its Equal Weight rating, noting that Cal-Maine shares have already traded up in response to these favorable conditions, making new investments difficult at current levels.
In other recent news, Cal-Maine Foods reported a record earnings per share of $10.38 for the third fiscal quarter of 2025. This performance marks a significant achievement for the company, although BMO Capital Markets anticipates a return to more typical earnings levels as commodity egg prices are expected to decrease. BMO Capital Markets initiated coverage on Cal-Maine Foods with a Market Perform rating and set a price target of $100, suggesting an approximate 8% potential upside from the current stock price. The firm uses a valuation approach that combines price-to-earnings on mid-cycle earnings and price-to-book value on the estimated book value for 2026. Despite the expected decrease in egg prices, BMO Capital forecasts that Cal-Maine Foods will maintain higher-than-average earnings through fiscal year 2026. Investors are advised to consider potential challenges when investing at current levels. Cal-Maine Foods has not commented on BMO Capital’s coverage or the price target. The stock’s performance will continue to be monitored by investors and industry observers.
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