J.P. Morgan Reports on Sanderson Farms

J.P. Morgan commented on Sanderson Farms SAFM in a report released yesterday. In the report, J.P. Morgan was not positive in its assessment of the company. J.P. Morgan writes, "Sanderson Farms this morning reported a $(0.74) fiscal second quarter, or $(0.56) excluding an inventory write-down. We include the write-down in our analysis, as we consider it a natural part of business. Either way, EPS beat both our estimate of $(0.99) and the Bloomberg consensus estimate of$(0.86).We rate SAFM Underweight, as we believe that the market is discounting an immediate and full margin recovery that may or may not happen. Note that SAFM's valuation metrics already are at significant premiums to those of other protein companies (which makes sense given that SAFM is trading off trough EPS, but it suggests that some upside is already priced in)." J.P. Morgan currently has an Underweight rating on Sanderson Farms. Shares of SAFM closed Monday at $45.99, down $1.12 from the open.