Benchmark Starts Cal-Maine (CALM) at Buy, Sees Mispriced Earnings Power

Cal-Maine Foods, Inc. (NASDAQ:CALM) is included among the 13 Best Debt Free Dividend Stocks to Buy Now.

On December 1, Benchmark began coverage of Cal-Maine Foods, Inc. (NASDAQ:CALM) with a Buy rating and a $100 price target. While the Cal-Maine name is widely recognized, the firm believes the stock’s valuation is “over-indexed to its legacy as a commodity producer.” In Benchmark’s view, the market is underestimating major changes underway in the egg category and Cal-Maine’s shift toward higher-value specialty products.

That mix shift, along with an expansion into prepared foods and a move away from market-based pricing toward contract-based pricing, adds up to what the firm describes as “a positive step change in earnings power.” It also improves long-term growth visibility, according to the analyst.

On December 3, Cal-Maine Foods, Inc. (NASDAQ:CALM) announced a new $15 million network optimization and capacity expansion project at Echo Lake Foods. The project is expected to add 17 million pounds of annual scrambled egg production by mid-fiscal 2027. The plan brings all scrambled egg manufacturing into one modernized facility. That creates a more centralized and efficient operation. A new production line will support near-term demand and longer-term growth.

By consolidating production, Echo Lake Foods reduces duplication across sites, simplifies workflows, and improves supply reliability. Upgraded equipment and added automation should also lift yields and lower labor needs. Taken together, these changes are expected to boost throughput and better position the business to meet rising customer demand as part of Cal-Maine’s broader prepared foods strategy.

This investment follows a previously announced $14.8 million high-speed pancake line project, which is expected to add another 12 million pounds of annual production through early fiscal 2027.

Cal-Maine Foods, Inc. (NASDAQ:CALM) also said its joint venture, Crepini Foods, plans to invest $7 million through fiscal 2028. That spending is expected to add 18 million pounds of production capacity. The expansion will come from new equipment and production lines installed over the next two years, increasing Crepini’s volume by more than seven times.

Altogether, these projects are expected to lift Cal-Maine’s prepared foods production capacity by more than 30% over the next 18 to 24 months.

Cal-Maine Foods, Inc. (NASDAQ:CALM) is the largest egg producer in the United States and a major player in the egg-based food market. With a broad national footprint, the company supplies protein products to millions of households each day.

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Disclosure: None.