Cal-Maine Foods price target lowered to $40 from $43 at Goldman Sachs

Goldman Sachs lowered the firm’s price target on Cal-Maine Foods to $40 from $43 and keeps a Sell rating on the shares ahead of its Q4 results. The firm is reducing its estimates to reflect the sharp decline in egg prices seen this spring amidst a gradual rebound in domestic layer supply and the absence of any new HPAI cases in the U.S. layer flock since December. Goldman Sachs adds however that while prices improved modestly in June, they now largely reflect to pre-HPAI pricing levels, which coupled with higher underlying unit costs from still-elevated feed costs, broader labor/processing cost inflation, and a larger mix of higher-cost cage-free production all suggests that the company is operating at-or-below break-even so far in Q1 of FY24.