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As part of our ongoing series at The Acquirer’s Multiple, each week we spotlight a stock from our Stock Screeners that might be a deeply undervalued gem hiding in plain sight. This week’s spotlight is Pilgrim’s Pride Corp (PPC).

Pilgrim’s Pride is one of the largest poultry producers in the U.S. with operations spanning fresh and prepared chicken products. While the company operates in a highly competitive, low-margin industry subject to commodity price swings, its scale, operational efficiency, and strong free cash flow profile provide a buffer of resilience. With steady consumer demand for protein and ongoing cost discipline, Pilgrim’s Pride may be priced more cheaply than its fundamentals warrant.

What is IV/P (Intrinsic Value to Price)?

IV/P tells you whether a stock offers more intrinsic value than the price you are paying for it. The calculation blends earnings power, reinvestment efficiency, and capital return policy to estimate intrinsic value — a conservative measure of what the business is worth.

The interpretation is straightforward:

• IV/P above 1 suggests undervaluation.
• IV/P below 1 suggests overvaluation.
• The further above 1, the more value you may be getting per dollar invested.

Pilgrim’s Pride’s IV/P is 1.30, meaning its intrinsic value is estimated to be ~30% higher than its current market price. This points toward a margin of safety and potential upside.

Supporting Metrics

• Market Cap: ~$9.79B
• Enterprise Value (EV): ~$12.3B
• Free Cash Flow (TTM): ~$1.1B
• Free Cash Flow Yield: ~10%
• Acquirer’s Multiple: 6.4

With a mid-single-digit Acquirer’s Multiple and double-digit free cash flow yield, PPC trades at levels suggesting the market is skeptical about its staying power — yet its cash generation tells a different story.

Revenue & Profitability

• Revenue (TTM): ~$18.2B
• Operating Income (TTM): ~$1.79B
• Operating Margin: ~9.9%
• Net Income (TTM): ~$1.24B
• Net Margin: ~6.8%
• Diluted EPS (TTM): 5.22

Margins, while modest, have been improving as PPC scales its operations and maintains pricing power in core markets. Even in a cost-sensitive protein industry, PPC has delivered consistent earnings.

Balance Sheet Strength

• Total Assets (2024): ~$10.7B
• Cash & Equivalents: ~$2.05B
• Total Debt: ~$3.47B
• Shareholder Equity: ~$4.25B
• Net Debt: ~$1.17B
• Working Capital: ~$2.57B

The balance sheet shows a healthy liquidity position with over $2B in cash and manageable leverage. Net debt is modest relative to operating cash flows, giving PPC flexibility to weather downturns or invest opportunistically.

Capital Returns

• Buyback Yield (TTM): ~1%
• Dividend Yield: 0% (no dividend program currently)
• Capital Expenditure (TTM): ~$0.52B

Rather than paying dividends, PPC has directed excess capital into capex for efficiency improvements and selective buybacks. With over $1B in free cash flow, there is capacity to enhance shareholder returns over time.

Why Might PPC Be Undervalued?

Consumer staples companies like Pilgrim’s Pride are often dismissed as low-growth commodity businesses. However, PPC’s strong cash generation, improving margins, and efficient capital allocation suggest more durability than the market may be pricing in. Its IV/P ratio above 1 and solid balance sheet highlight a built-in margin of safety.

Conclusion

With an IV/P of 1.30, an Acquirer’s Multiple of 6.4, double-digit free cash flow yield, and a balance sheet positioned for resilience, Pilgrim’s Pride Corp (PPC) offers value investors a compelling case in the consumer staples sector. While it operates in a cyclical, competitive market, the company’s scale, efficiency, and consistent cash generation suggest that the current valuation may understate its long-term potential.

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