Analyst ups Smithfield Foods rating, price target

(AP)  NEW YORK — An analyst raised Smithfield Foods Inc.'s rating and price target on Friday, saying the world's biggest hog producer is likely to capitalize on strong pork exports.

Robert Moskow of Credit Suisse said in a client note that U.S. pork exports through September are up 20 percent over last year mostly due to shipments to China, Hong Kong and Korea.

"With the U.S. competitive price position and plentiful supplies of safe pork, the growing economies in Asia will continue to look to the U.S. for pork which we expect to drive 15 percent export growth in the next five years," he wrote.

Moskow said pork demand will also likely be helped by difficulties that the beef industry is facing, as the Agriculture Department has estimated that severe drought conditions in Texas and negative margins for cattle ranchers will likely result in a 5 percent reduction in the U.S. cattle herd next year.

"We see this as a positive for pork demand and prices yielding better processing margins and higher hog production margins for Smithfield," the analyst said.

Moskow boosted Smithfield to "Outperform" from "Neutral" and raised its price target to $29 from $23.

A representative for Smithfield Foods could not be immediately reached for comment.

Shares of the Smithfield, Va., company gained 73 cents, or 3.2 percent, to $23.35 in midday trading. The stock has traded in a 52-week range of $16.33 to $24.93.