) to hold.
Analyst John McMillin says his downgrade of the meat and poultry processor is based on price appreciation and some new fundamental issues. He says he thinks the reason for appreciation is due to a strong June quarter, for which he thinks the company could exceed his $0.27 earnings per share estimate.
That said, he says corn and soybean crops will experience critical growing periods over the next few weeks. Persistent dry, hot conditions during pollination period sharply reduce crop yields.
McMillin says he's worried about costs. He also notes the the potential for a Russia ban on U.S. poultry, which would further impact margins. McMillin thinks hog and cattle supplies appear less plentiful in fiscal 2003. He is keeping his $1.15 fiscal 2003 (Sept.) earnings per share estimate, and cut the $1.45 fiscal 2003 estimate to $1.40.