Sanderson Farms Shares Fall On Analyst Downgrade

MILWAUKEE (AP) — Shares of Sanderson Farms Inc. tumbled on Tuesday after an analyst downgraded the stock, saying he continued to look positively on the chicken producer but the stock had to be downgraded after it passed his price target.

Shares fell $2.29, or 5.6 percent, to $38.68 in morning trading Tuesday.

JPMorgan analyst Ken Goldman lowered his rating on the Laurel, Miss.-based company to "neutral" from "overweight" after it hit his price target of $38. He told clients in a note the move was mainly related to valuation.

"We continue to look positively upon Sanderson's fundamentals and think that profitability is on the immediate horizon," he wrote. "However, following the stock's recent upswing, we now believe that potential risks and rewards are balanced."

The company's stock has soared after its low of $20.24 in November, and Goldman said the boost in share price was warranted as conditions in the industry improved.

Meat makers have been hurting as they work through ingredient prices that reached record highs last summer. A glut of meat on the market kept prices down, but production cuts are helping restore prices.