Smithfield Foods (NYSE:SFD) Getting Long-term Benefit from Hog Prices

Goldman Sachs (NYSE:GS) says Smithfield Foods (NYSE:SFD) will be helped over next several years as hog prices are higher than historical averages.

They said that "the outlook for hog prices to climb +15% in CY2011 down from our +20% prior view as we now expect an incremental +50 bp supply improvement industry-wide from SFD’s productivity efforts."

For full year 2011 they raised EPS estimates from $2.00 to $2.15. For full year 2012 they dropped EPS estimates by $0.10 to $1.75, and for full year 2013 they raised them from $1.50 to $2.05, again, citing processing margins for pork.

Goldman reiterates their "Buy" rating on Smithfield, which closed Friday at $20.28, up $0.58, or 2.94 percent. They raised their price target on them from $18 to $22.