The U.S. pork industry has recently faced some challenges due to trade tensions and regulatory issues. However, at least one concern seems to have been eased after Canada lifted its suspension on imports from Smithfield Foods’ (SFD) Tar Heel, North Carolina facility, which is the largest U.S. pork-processing plant.
The suspension, which lasted from March 6 to March 12, was due to issues with offal shipments and not related to tariffs, according to Smithfield CEO Shane Smith. Offal refers to organs and other edible parts of animals that are often used in food products. The company has been working to resolve the matter, and pork items produced after March 12 are now eligible for export to Canada. This was undoubtedly a welcomed relief for Smithfield, which relies on exports to Canada and other countries.
Nevertheless, the U.S. pork industry still has to deal with tariffs. Specifically, Smithfield Foods, which exports offal products like pig stomachs and hearts to China, may have a hard time finding new markets for these products due to retaliatory tariffs imposed by China. The tariffs were a response to President Donald Trump’s announcement of tariffs on goods from China, Mexico, and Canada. However, CEO Shane Smith remains optimistic that China will still be a viable market for offal despite the tariffs.
Is SFD Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on SFD stock based on six Buys, one Hold, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 7% decline in its share price over the past year, the average SFD price target of $27.43 per share implies 43.7% upside potential.
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