US: Smithfield stock hits 5-year low on downgrades
The share value of Smithfield Foods hit a five-year low today (27 June) as two investment firms cut the company's rating.
Shares in the US meat processor fell 20.2% to US$19.67 at time of press. This represents its lowest level since January 2003.
The decline in share value follows a move by Standard & Poor to lower its ratings two notches to 'BB-' from 'BB+'.
The investment bank said it anticipates a "challenging" operating environment will impact Smithfield results through most of fiscal 2009.
Meanwhile, in a note to investors an analyst at DA Davidson wrote that record corn prices make it hard to tell when losses at the group's hog unit will end.
"The combination of reduced earnings, deteriorating credit quality, surging working capital and no foreseeable peak in corn prices points to share price risk to the $14 level," the investor note read.
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