Seaboard (SEB): Reviewing Valuation After a 70% One-Year Share Price Surge

Seaboard (SEB) has quietly delivered a strong year, with the stock up about 81% year to date and 70% over the past year, even as recent weekly moves have turned negative.

See our latest analysis for Seaboard.

That surge has come with some choppiness, as the 1 month share price return of 19.32% and 90 day share price return of 11.46% contrast with a recent 7 day share price pullback. This suggests momentum is pausing rather than breaking after a 1 year total shareholder return of 70.34%.

If Seaboard’s run has you rethinking what else could surprise to the upside, this is a good moment to explore fast growing stocks with high insider ownership.

With Seaboard’s shares already clocking steep gains and its valuation metrics turning less obviously cheap, the real question now is whether investors still have upside to capture or if the market has already priced in the next leg of growth.

Price-to-Earnings of 10.6x: Is it justified?

Seaboard trades on a price to earnings ratio of 10.6 times, which looks inexpensive relative to peers despite the share price’s strong run to $4,393.32.

The price to earnings multiple compares the company’s share price to its per share earnings, making it a straightforward way to gauge how much investors are paying for current profitability. For a diversified agribusiness and transportation group like Seaboard, this lens is especially relevant because earnings quality, margin stability, and capital intensity all feed directly into what investors are prepared to pay.

Here, Seaboard’s 10.6 times earnings stands below both the broader US market multiple of 18.7 times and the peer average of 18.6 times. This implies the market is not fully pricing in its recent profit rebound or relative earnings strength. The SWS DCF model, however, suggests the stock price already sits well above an estimated fair value of about $1,433.36. This is a reminder that headline multiples can look inexpensive even when a cash flow based valuation implies downside.

Compared with the US Food industry average of 20.5 times earnings, Seaboard’s discount is stark, pointing to a materially lower valuation than sector peers despite outperformance in the past year. That gap leaves open the possibility that the share price could move closer to peer levels over time if earnings resilience persists, or instead drift back towards the fair value implied by cash flow assumptions if current profits prove hard to sustain.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Earnings of 10.6x (UNDERVALUED)

However, investors should watch for earnings volatility from cyclical commodity markets, as well as any setback in global shipping demand that could pressure margins and sentiment.

Find out about the key risks to this Seaboard narrative.

Another Lens on Value

Our DCF model tells a very different story, with Seaboard’s estimated fair value closer to $1,433.36 than the current $4,393.32. This implies the shares may be significantly overvalued. Is this simply the market looking past near term cash flows, or a sign expectations have run too far?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Seaboard for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 912 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Seaboard Narrative

If you see the numbers differently, or want to stress test our assumptions with your own inputs, you can build a custom view in minutes with Do it your way.

A great starting point for your Seaboard research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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