UPDATE: Bank of America Downgrades Tyson Foods & Smithfield Foods
Bank of America commented in the report, "We are downgrading Tyson and Smithfield from Buy to Underperform due to lower estimates as a result of margin weakness from soft demand, a moderating outlook for domestic and emerging market economic growth, a strengthening US dollar which could weigh on exports, and rising corn and soybean meal prices. While the stocks have already had significant downward moves (both down ~10% over last 2 weeks), we believe there could be further downside risk, and at the very least will underperform our coverage group until we get more stable protein demand and clarity around the corn crop which will not likely happen near term."
Bank of America lowered the PO on Tyson Foods from $22 to $16 and decreased the PO Smithfield Foods from $24 to $19. Tyson Foods closed yesterday at $17.06, while Smithfield Foods closed at $19.54.
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