Skip to main content

Market Overview

Could Pilgrim's Pride Be The Biggest Winner From McDonald's Chicken Sandwich Launch?

Share:
Could Pilgrim's Pride Be The Biggest Winner From McDonald's Chicken Sandwich Launch?

Fast-food giant Mcdonald's Corp (NYSE: MCD) launched its new premium chicken sandwich and the biggest winner could be chicken supplier Pilgrim's Pride Corporation (NASDAQ: PPC), according to BofA Securities.

The Pilgrim's Pride Analyst: Peter Galbo maintains a Buy rating on Pilgrim's Pride's stock with an unchanged $25 price target.

The Pilgrim's Pride Thesis: McDonald's entrance into the premium chicken sandwich war implies more than 50% of all quick-service restaurants feature a chicken sandwich on their menu, Galbo wrote in a note. The growing popularity of chicken sandwiches and continued adoption bodes well for chicken suppliers, especially Pilgrim's Pride.

Tyson Foods, Inc. (NYSE: TSN) is among the largest chicken suppliers to McDonald's, but smaller-sized chickens are the preferred choice for sandwiches, the analyst wrote. Tyson's exposure to smaller chickens accounts for around 20% of its total chicken portfolio compared to Pilgrim's larger exposure at one-third of its U.S. capacity.

Related Link: Yes, Even Taco Bell Is Entering The Chicken Sandwich Battle

Pilgrim's is also converting one of its large bird facilities to small bird to address the growing demand for smaller chickens.

Finally, it has never been confirmed if Pilgrim's supplies chicken to McDonald's, but the company will benefit regardless from the chicken sandwich wars.

PPC Price Action: Shares of Pilgrim's Pride were trading higher by 1.4% Thursday morning at $22.81.

(Photo by Daniel Tuttle on Unsplash)

Latest Ratings for PPC

DateFirmActionFromTo
Feb 2021Stephens & Co.UpgradesEqual-WeightOverweight
Oct 2020BarclaysUpgradesEqual-WeightOverweight
Jun 2020BarclaysDowngradesOverweightEqual-Weight

View More Analyst Ratings for PPC
View the Latest Analyst Ratings

 

Related Articles (PPC)

View Comments and Join the Discussion!

Posted-In: BofA Securities chicken Chicken SandwichAnalyst Color Price Target Restaurants Analyst Ratings General Best of Benzinga

Latest Ratings

StockFirmActionPT
GIKColliers SecuritiesInitiates Coverage On14.0
SANWLake StreetInitiates Coverage On6.0
LILAMorgan StanleyDowngrades15.0
BEJP MorganUpgrades36.0
NEXACredit SuisseUpgrades11.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com