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【出版时间及名称】：2010年4月美国食品行业研究报告
【作者】：德意志银行
【文件格式】：pdf
【页数】：44
【目录或简介】：
Fundamental, Industry, Thematic, Thought Leading
Deutsche Bank Company Research's Product Committee has deemed this work
F.I.T.T. for investors seeking differentiated ideas. Here our Agribusiness/Protein
and Restaurant teams take a collaborative approach in studying the issues
surrounding the supply-demand balance in the protein industry and the impact of
higher protein prices on meat producers/processors and restaurants.
Deutsche Bank Securities Inc.
All prices are those current at the end of the previous trading session unless otherwise indicated. Prices are sourced from local
exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies. Deutsche
Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm
may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single
factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1.
MICA(P) 106/05/2009
FITT Research
Top picks
Smithfield Foods (SFD.N),USD20.04 Buy
Chipotle Mexican Grill, Inc (CMG.N),USD126.75Buy
Companies featured
Sanderson Farms (SAFM.OQ),USD57.82 Hold
Smithfield Foods (SFD.N),USD20.04 Buy
Tyson Foods (TSN.N),USD20.21 Hold
Burger King (BKC.N),USD21.47 Buy
McDonald's (MCD.N),USD70.36 Buy
YUM Brands, Inc. (YUM.N),USD43.11 Hold
Chipotle Mexican Grill, Inc (CMG.N),USD126.75Buy
Darden Restaurants (DRI.N),USD47.40 Hold
Ruth's Hospitality Grp. (RUTH.OQ),USD5.75 Buy
Panera Bread Co (PNRA.OQ),USD85.16 Buy
Texas Roadhouse (TXRH.OQ),USD15.77 Hold
Hormel Foods (HRL.N),USD41.54 Sell
Archer-Daniels-Midland (ADM.N),USD28.77 Buy
Corn Products International (CPO.N),USD34.89 Hold
Ratings and estimates changes
Hormel SELL from HOLD
F2010E EPS $2.63 from $2.76
Smithfield
F4Q10E EPS ($0.40) from ($0.23)
F2011E EPS $2.05 from $1.63
Sanderson Farms
F2010E EPS $5.57 from $4.49
Tyson
F2010E EPS $1.82 from $1.41
Fundamental: supply-demand dynamics favorable for protein
Based on USDA estimates, a combination of lower production and a recovery in
exports should lead to a 5.8% and 2.5% drop in domestic per capita pork and beef
availability, respectively. Against this backdrop + considering a slight improvement
in the economy and better foodservice demand at the margin, chicken per capita
consumption is expected to grow 4.6%. With supply tight until at least late
2010/early 2011, higher demand should support protein prices.
Industry: what are the implications for the restaurant industry?
In light of this evolving fundamental outlook for proteins, we’ve looked at (1) the
recent moves in the commodity costs that matter most to restaurants, (2) key
commodity exposures across the group, (3) the latest commodity outlook for each
company and (4) potential earnings risk/sensitivity. Our conclusion is that we do
not see much commodity-related risk to restaurant profit forecasts in the near
term, as most chains have already locked in major items for the balance of 2010
(w/ ground beef as a possible exception). However, we do see some risk to 2011
forecasts, as prices for most key commodities are significantly higher and
consensus expectations call for higher EPS growth. Each 1% move in food costs
impacts avg. restaurant EPS by 2-3% and margins by ~30bps.
Thematic: stock implications
We downgrade HRL to SELL on rapidly rising raw material costs and premium
valuation, despite mgmt excellence and strong free cash flow generation. We
remain positive on SFD on tight overall protein supply, a benign feed cost
environment, improving demand (helped by the “breakfast wars”), and the
potential for de-leveraging. The biological lag associated with hog production
serves as insulation against rising production. We believe there is near-term
upside in both SAFM and TSN owing to lower availability of competing meats,
which should lead to retail and foodservice featuring of chicken this
spring/summer. We raise estimates and price targets on SFD, TSN and SAFM. We
remain positive on the restaurant group in the near-term, with Buy ratings on BKC,
CMG, MCD, PNRA and RUTH. However, we believe the margin for error has
diminished as valuations and expectations have moved higher. Given the recent
strength in share prices, investors may begin to look for a good reason to trim
positions. Rising commodity costs could emerge as a potential negative catalyst
for the stocks.
Thought Leading: comprehensive approach provides needed background
Through a collaborative research process we have identified key secular themes
across the protein and restaurant industries. The protein industry has been
characterized by the typical boom and bust cycle. With breeding herds/flocks cut,
production increases will take time. Restaurants are in the “sweet spot” of firming
demand and benign input costs, but the latter may not last for long.
Table of Contents
Executive Summary........................................................................... 4
Outlook – Protein ......................................................................................................................4
Outlook – Restaurants...............................................................................................................5
Valuation ..................................................................................................................................6
Risks ........................................................................................................................................6
Near-term looks meaty ..................................................................... 7
Pork supply comes in tighter than expected.............................................................................8
Upside to chicken ...................................................................................................................11
Ratings & estimate changes ...................................................................................................16
Implications for restaurants ........................................................... 21
Protein gain = restaurant pain? ...............................................................................................21
What’s happening with commodities? ...................................................................................24
PPI also points to higher food costs ahead.............................................................................27
What are the companies saying?............................................................................................28
What’s the sensitivity to earnings? .........................................................................................30
2011 forecasts could be the bigger concern...........................................................................30
Commentary and outlook for covered companies ..................................................................34
Restaurant price targets and risks...........................................................................................35
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