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Pilgrim's Pride Corporation (PPC) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Pilgrim's Pride Corporation (PPC)

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Intrinsic Value (DCF)

Current$41.63
→
Intrinsic$181.00
+335%
$121.43$181.00$294.11
Market implies 1% growth for 5 years
DCF analysis suggests PPC could have 335% upside at 20% growth — verify assumptions match your view.
At $42, the market prices in only 1% growth — below historical 20%, suggesting low expectations.
Range: Bear $121 → Bull $294. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →16%18%20%22%
8%$222$241$261$283
10%$154$167$181$196
12%$117$126$137$148
14%$93$101$109$117

Bull Case

  • Bull case ($294) offers 606% upside at 24% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (20%)

Bear Case

  • Bear case ($121) with 16% growth, 12% discount rate
  • Using 20% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$1.82B
Year 2$2.18B
Year 3$2.62B
Year 4$3.15B
Year 5$3.78B
Terminal$55.63B

📐 Model Inputs

Growth Rate20.1%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$1.51BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is PPC stock undervalued or overvalued?
🟢 UNDERVALUED

PPC trades at $41.63 vs. our DCF-derived intrinsic value of $180.39, implying +300% upside. At a 10.0% WACC and 20.1% projected FCF growth, the market appears to be underpricing the present value of PPC's future cash flows. The bear case ($116.25) still suggests upside, providing margin of safety.

What is PPC's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.51B, projected at 20.1% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $1.43B net debt and dividing by 0.24B shares: Bear $116.25 | Base $180.39 | Bull $274.83. Current price $41.63 implies +300% to base case.

How is PPC's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.1% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($44.32B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.