Cal-Maine Meals (NASDAQ: CALM) inventory, the nation’s largest publicly traded producer of eggs, fell 4.1% via 11:45 a.m. ET after beating on earnings however lacking badly on gross sales in its Q2 2026 earnings report Wednesday.
Heading into the report, analysts forecast Cal-Maine to earn $2.01 per share on gross sales of $826.4 million. Cal-Maine really earned $2.13 per share, however its gross sales have been solely $769.5 million.
Cal-Maine’s income declined greater than 19% in Q2. Specialty egg gross sales (natural, free vary, and related) held up nicely 12 months over 12 months, however standard egg gross sales crashed 41% 12 months over 12 months as egg costs plummeted.
CEO Sherman Miller highlighted the “sturdy costs and volumes” of the corporate’s specialty egg enterprise. Miller famous that “regardless of the impression of [conventional] eggs costs” falling after “provide demand imbalances and historic worth ranges” in 2025, the corporate turned in a “stable” efficiency in Q2 2026.
Cal-Maine earned practically $25 a share final 12 months, an traditionally sturdy efficiency that won’t quickly repeat. Analysts count on the corporate’s earnings to drop to roughly $9.31 per share in 2026 — and hold falling for the subsequent two years.
Ordinarily, we begin with a inventory’s earnings after which calculate whether or not progress is robust sufficient to justify the inventory worth, however this strategy merely would not work when earnings are anticipated to fall, somewhat than rise. With Cal-Maine, due to this fact, the most effective strategy could also be to contemplate the worst-case situation — earnings falling to $6.67 per share by 2028, as analysts forecast — and evaluate that to the inventory worth.
Valued this fashion, Cal-Maine inventory prices about 11.5 occasions earnings two years out, a valuation much like the inventory’s 11% dividend yield. To me, this appears a good worth to pay for Cal-Maine inventory.
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