Smithfield Foods' (SFD) "prudent" 2026 guidance, which came in above consensus, is expected to leave room for upside, Morgan Stanley said in a Tuesday note.

Analysts see further upside driven by execution improvements and structural cost progress across the business.

Analysts highlighted cost improvements in hog production, mix-driven growth in packaged meats, and innovation-led margin gains as supporting earnings momentum, despite management's cautious stance on consumer demand and input costs.

Management's 2026 outlook excludes contributions from the pending acquisition of Nathan's Famous, expected to close in H1 of 2026 and be immediately accretive, the firm said.

Morgan Stanley maintained its overweight rating on the stock and raised its price target to $31 from $29.

Shares of Smithfield Foods were up over 4% in Wednesday trading.

Price: 25.44, Change: +0.96, Percent Change: +3.92