SMITHFIELD FOODS, INC. (SFD): what the price requires

The current priced-in claim for SMITHFIELD FOODS, INC. (SFD) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.

Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/SFD

Headline

FieldValue
TickerSFD
CompanySMITHFIELD FOODS, INC.
Current price$24.71/sh
CompositionPackaged Meats 56% / Fresh Pork 32% / Hog Production 8% / Other 3%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed2.8%
Operating margin today8.1%
Margin compression implied-5.3pp
Multiple paid10x operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 8.2% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range

ReferenceValue
vs own history-0.41σ
cohort percentile (of 69 peers)9
implied end-window share0%

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset0.78x5justifies
Earnings1.04x3expensive
Relative0.49x5justifies
Growth1.21x1expensive

Families that justify the price: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.9%); the inversion above states its own rate.

Per-Model Detail (n=14)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$0.00—noNegative/zero FCF — equity value floored at $0
DCF Exit MultipleGrowth$0.00—noNegative/zero FCF or EBITDA — equity value floored at $0
Relative ValuationRelative$50.310.49xyesP/E 17.07x (blended: static sector reference 22x + trailing (TTM) 10x), scenarios: 14.3x / 17.1x / 19.9x (bear / base = reference held flat / bull), EV/EBITDA 14x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$27.640.89xyesBV/sh $17.39, ROE (TTM) 14.7%, ke 9.3%
Two-Stage Excess ReturnAsset$34.440.72xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$20.461.21xyesRev $15.6B, growth 8% (input: historical growth; tapered), Terminal P/S: 0.5x / 0.6x / 0.7x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$30.720.80xyesEPS $2.56, growth 1% (input: historical EPS growth), PEG=7.65 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$20.561.20xyesNormalized EBIT (5y avg op income, one-time charges added back) $1.00B × (1−22%) / WACC 7.9% → EPV (no growth)
Residual IncomeAsset$35.410.70xyesBV $17.39 + 5yr PV of (ROE (TTM) 14.7% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$31.650.78xyes√(22.5 × EPS $2.56 × BVPS $17.39) — Graham's conservative floor
EV/EBITDA RelativeRelative$53.510.46xyesEBITDA $1.64B × sector EV/EBITDA 14.0x
FCF YieldEarnings——no—
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings$23.661.04xyesEPS $2.56 × (8.5 + 2×1.3%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$6.613.74xyesBV $17.39 × (ROIC 3.0% / WACC 7.9%)
P/Sales SectorRelative$78.850.31xyesRevenue $15.56B × sector P/S 2.0x
PEG Fair ValueRelative$12.801.93xyesEPS $2.56 × (PEG 1.5 × growth 1.3% (input: historical EPS growth)) → PE 1.9x
Earnings YieldEarnings$27.680.89xyesEPS $2.56 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$2.0b
Net debt / NOPAT (after-tax)2.11x
Net debt / operating income (pre-tax)1.64x
Interest coverage29.9x
Burning cashyes

Bullet Takeaways

Bull Case

Smithfield's balance sheet is the quiet anchor under a business the market treats as a commodity processor. Trailing operating income runs about $1.3 billion, and against net debt near $2.0 billion that is leverage of roughly 1.5 times operating income, with interest covered more than thirty times over. For the largest pork processor in the country, that is conservative, and it gives the company room to invest through the cycle in automation and brand expansion rather than cutting when hog prices turn. A buyer here is not underwriting a survival story; the financial position is sound, and the recently reinstated public listing came with a dividend lifted to $1.25 per share for 2026.

The profit mix is shifting toward the steadier, higher-margin end. Packaged Meats, the branded, value-added segment, now makes up more than half of revenue and carried the quarter: $2.15 billion of revenue, up 6.2%, at a 12.8% operating margin, versus the Fresh Pork segment's 3.9%. That gap is the whole strategy. The branded business behaves more like a packaged-food company than a meatpacker, and Smithfield is steering volume and share into its high-margin categories. The first quarter of 2026 was the company's strongest first-quarter operating profit on record, $339 million at an 8.9% margin.

The valuation makes this a value setup rather than a growth bet. Most families of method land above today's $24.95 (June 28, 2026). The peer-multiple lens reads the price at roughly half of where comparable food companies trade, and the asset and earnings-yield reads land above the price on a book value of $17.39 per share and a return on equity near 14.7%. The branded peer set frames the prize: Tyson's filing describes the same packaged-meats economics of selling, marketing, and promoting branded products at margins above raw protein. Smithfield is the cheaper way into that mix, with the branded segment doing the heavy lifting and the price valuing the whole company as if it were still mostly a hog processor.

Bear Case

The structural truth a Smithfield holder lives with is that the cash-generative half of the business is fully exposed to commodities and geopolitics, and neither is in management's control. Fresh Pork operating profit fell 4.3% to $78 million in the first quarter, hit by winter-storm disruptions and lower China export sales after tariff disruption. That is the recurring shape of the risk: protein production swings with herd economics, and export demand swings with trade policy. Tyson's filing captures the supply backdrop bluntly, noting that domestic protein production "decreased slightly in fiscal 2025", the kind of supply shift that whips margins in either direction. A single bad trade decision or disease event in the hog supply can move a year's earnings.

Governance is the other fact that does not show up in the multiple. Smithfield is controlled by its parent, which keeps the public float a minority of the equity and means outside holders ride alongside a controlling owner whose interests may diverge on capital allocation, related-party dealings, and the timing of returns. A controlled company priced cheap can stay cheap precisely because the market discounts the limited say minority holders have. That discount is rational, not a mispricing to arbitrage away.

The valuation tension is narrower than the headline cheapness suggests. The lens that calls the price expensive is the earnings-power read, which values a normalized operating profit averaged over five years that includes the trough and lands above the price. Packaged Meats is the durable engine, but even there the margin slipped slightly, from 13.1% to 12.8% year over year, and branded pricing has limits when consumers trade down. The bear case is not that Smithfield is overvalued; it is that the cheapness is the market's fair price for a controlled, commodity-geared company whose branded growth has to keep outrunning the volatility of the fresh-pork and export businesses. If branded margin erodes while fresh pork and exports stay choppy, the discount to peers is justified rather than temporary.

Valuation

Smithfield's price is best read as a blended bet, because the company is two businesses at very different margins. The whole-company operating margin runs about 8.4%, and inverted, today's price requires only a modest margin to be sustained, which is why most of the valuation families read the stock as supported or cheap rather than stretched. The priced-in assumption sits within the range the company's own history supports.

The method spread tilts toward value. The peer-multiple lens is the most generous, placing the price near half of where comparable food companies trade on earnings, and the EV/EBITDA read agrees. The asset-based excess-return model and the earnings-yield read both land above the price on a book value of $17.39 per share and a return on equity near 14.7%. The one dissent is the earnings-power lens, which normalizes operating profit across five years, including weaker ones, and lands above the price as a no-growth floor; it is the cautious read, not the central one. The pattern is a value-and-asset-supported name: many methods say cheap, one says fully valued on a smoothed-down profit, and none says the price is a bet beyond what the business supports. The useful peer frame is the margin contrast: Smithfield's Packaged Meats segment at a 12.8% margin behaves like the branded food peers, while its Fresh Pork segment at 3.9% behaves like the commodity processors, and the blended multiple averages the two.

Solvency bounds the downside comfortably. Net debt near $2.0 billion against $1.3 billion of trailing operating income is about 1.5 times, and interest coverage above thirty times leaves ample room. The structural caveat is not leverage; it is control. A controlling parent holds the majority of the equity, which is part of why the price trades at a discount to the branded peers it increasingly resembles. What the buyer underwrites at this level is that the branded-margin shift continues to outweigh the commodity and export volatility, in a company where minority holders sit alongside a controlling owner.

Catalysts

Smithfield delivered its strongest first quarter on record. Consolidated sales rose 1% to $3.8 billion, adjusted operating profit reached $339 million at an 8.9% margin, up 4% year over year, and diluted EPS came in at $0.64 against $0.58 a year earlier. The Packaged Meats segment drove it, with revenue up 6.2% to $2.15 billion and operating profit of $275 million at a 12.8% margin, as the company grew volume and unit share in high-margin categories. Fresh Pork was the soft spot, with operating profit down 4.3% to $78 million on winter-storm disruptions and lower China export sales tied to tariff disruption.

Capital return and guidance framed the outlook. Smithfield raised its 2026 dividend to $1.25 per share and reaffirmed full-year guidance despite inflation and macro volatility, citing robust liquidity and continued investment in automation and brand expansion. The two events to watch are the trajectory of branded Packaged Meats margins, which slipped slightly year over year, and the resolution of the China export and tariff situation, since the Fresh Pork segment's recovery depends heavily on the export channel reopening. The next quarterly print tests whether the branded momentum holds while fresh pork stabilizes.

Peer Cohorts (Per Segment, With Filing Citations)

Packaged Meats (reported)

Fresh Pork (reported)

Hog Production (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Q1 2026 earnings, April 2026

View the full interactive SFD report on boothcheck