Smithfield Foods (SFD) is back on investor screens after recent share price moves, with the stock returning 9.3% over the past month and 16.0% over the past 3 months.

That recent 9.3% 1 month share price return sits alongside a 9.9% 3 month share price return and a 16.0% 1 year total shareholder return. Together, these figures point to momentum building rather than fading around the current US$24.20 level.

If Smithfield Foods has caught your eye, it could be a good moment to widen your watchlist and look at healthcare stocks that might fit a similar long term investing approach.

With the shares at US$24.20, currently trading at a 21% discount to the analyst price target and showing a 67% gap to one intrinsic value estimate, investors may ask whether Smithfield Foods is still undervalued or whether the market is already pricing in future growth.

Most Popular Narrative: 17.6% Undervalued

With Smithfield Foods last closing at $24.20 against a most-followed fair value of $29.36, the current price sits below that narrative anchor and puts the focus on what is driving those expectations.

Premiumization within core categories such as packaged lunch meat, dry sausage and value added case ready items is shifting mix toward higher margin everyday products and supporting sustained revenue growth and structurally higher net margins.

Curious what kind of revenue path and margin profile could justify that gap to fair value? The narrative leans on steady top line progress, fatter margins and a future earnings multiple that still sits below the wider US Food group. Want to see how those moving parts are stitched together into that $29.36 fair value?

Result: Fair Value of $29.36 (UNDERVALUED)

However, this story could change quickly if pork disease pressures keep hog costs high, or if lower income shoppers trade down more aggressively and squeeze premium volumes.

Build Your Own Smithfield Foods Narrative

If the current fair value story does not quite fit how you see Smithfield Foods, you can test the assumptions yourself and shape a version that reflects your own research in just a few minutes, then Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Smithfield Foods.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.