Tuesday, December 7, 2010

Goldman (NYSE:GS) Cautious on Sanderson Farms (NASDAQ:SAFM)

Goldman Sachs (NYSE:GS) says that even though Sanderson Farms (NASDAQ:SAFM) was optimistic on strong chicken prices in the fourth quarter, they see it as being already priced into the stock and other challenges will be what investors look at when considering the company.

Goldman said, "though recent management commentary suggests 4Q results will be strong on the back of robust chicken prices and favorable feed costs, we don’t expect this to be a positive catalyst for two reasons: (1) we believe a solid 4Q10 print is already expected and (2) investors are likely to look through the print towards incremental challenges in 2011."

Higher feed prices and chicken supply is of particular concern for them going forward.

Even so, Goldman did raise their EPS estimate on them from $1.62 to $1.70, and retain their full year 2012 estimate on them at $2.

Sanderson was trading at $41.11, up $0.17, or 0.42 percent as of 12:18 PM EST.

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