In its second quarter earnings report, Cal-Maine Foods revealed a remarkable 82% year-over-year revenue surge to $954.7 million, surpassing analysts’ projections of $751.5 million. Concurrently, net income for the quarter exceeded expectations at $219.1 million, compared to the anticipated $208 million.
Cal-Maine Foods CEO Sherman Miller underscored the impact of escalating market prices on the company’s performance, attributing the phenomenon to the ongoing scarcity of shell eggs resulting from recent outbreaks of highly pathogenic avian influenza (HPAI). Miller likened the current state of the egg market to a “seller’s market,” pointing out the heightened consumer demand for egg cartons.
Despite the escalating demand, Miller cautioned against investing in Cal-Maine’s stock at its current value of nearly $105 per share, citing a price-to-book ratio of $2.51 based on Yahoo Finance data. He further projected a potential dip in egg prices and the company’s stock value in 2023 as avian flu concerns diminish, echoing similar trends that may manifest in 2025.
Contrasting Miller’s stance, another industry expert, Trainer, expressed optimism about the stock’s prospects, deeming it “very attractive” and foreseeing continued business outperformance. Trainer highlighted the stock’s current affordability in relation to its profits, suggesting an additional 10% to 20% upside potential followed by an eventual peak indicative of profit-taking opportunities.
Over the past year, Cal-Maine’s stock has surged by nearly 90%, significantly outperforming the broader market represented by the S&P 500, which saw a 24% increase in the same period.
Brooke DiPalma, a senior reporter at Yahoo Finance, provides ongoing coverage of developments in the retail stock market. For the latest updates and insights to guide your investment decisions, follow DiPalma on Twitter at @BrookeDiPalma or reach out via email at bdipalma@yahoofinance.com. Stay informed about retail stock news and upcoming events to optimize your investment strategy.
