Smithfield Foods stock holds steady as Citi reiterates buy rating

Citi reiterated its buy rating and $28.00 price target on Smithfield Foods (NASDAQ:SFD) Monday following meetings with the company’s management team in Boston last week. According to InvestingPro data, the stock currently trades at $23.56, with analysts’ targets ranging from $24 to $32. The company maintains a "GREAT" overall financial health score of 3.45 out of 4.

The meetings included Smithfield’s CEO Shane Smith, CFO Mark Hall, Treasurer Jenifer Byrd, and IR Julie MacMedan, according to Citi’s research note. Despite acknowledging a weaker consumer environment, the management team conveyed an "generally upbeat" tone about current trends and longer-term growth opportunities. The company’s strong market position is supported by its $14.47 billion in revenue over the last twelve months.

Citi noted that demand for Smithfield’s pork-based products "seems to be holding in well" despite economic challenges. The company’s tariff exposure appears "manageable" and is limited to its Fresh Pork segment, while its significant private label share reduces exposure to branded share losses in certain categories. With a gross profit margin of ~14% and healthy cash flows, the company demonstrates resilient operational performance. Discover more detailed financial metrics and exclusive insights with InvestingPro’s comprehensive research report.

The research firm acknowledged potential headwinds to Smithfield’s valuation multiples, including its short track record as a public company and the relative illiquidity of its shares, with less than 10% float. Citi suggested these challenges "could ease with the passage of time."

Smithfield Foods is "well positioned in the currently challenging environment for food producers," according to Citi, citing the company’s protein-centric portfolio, private label presence, and improved profitability in its Hog Production segment.

In other recent news, Smithfield Foods reported a strong start to its fiscal year 2025, with a significant increase in both adjusted operating profit and sales. The company posted an adjusted operating profit of $326 million, an 86% increase from the previous year, while consolidated sales reached $3.8 billion, marking a 9.5% increase. Adjusted net income rose to $227 million, compared to $123 million in the same quarter of the previous year, and adjusted earnings per share increased to $0.58 from $0.32. In addition, Smithfield Foods held its 2025 Annual Meeting of Shareholders, where key proposals were approved, including the election of directors and the ratification of Ernst & Young LLP as the independent accounting firm. Shareholders also supported an advisory vote on executive compensation for fiscal year 2024. These developments reflect a strong endorsement of the company’s current leadership and strategic direction. Smithfield Foods continues to focus on product innovation and efficiency improvements to drive future growth.

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