Cal-Maine Foods, Inc.: stock price estimation in the midst of pandemic

This case concerns an analyst’s task to value Cal-Maine Foods, Inc., the largest and only publicly traded U.S. egg production firm. The case takes place in 2020, at the time of the Covid-19 pandemic. Historically volatile egg prices were even more volatile in April 2020, with a large spike in prices that led the state of Texas to sue the firm for price gouging. Added to this, Cal-Maine had an unexpectedly bad earnings report a few months earlier, and prior to that, the firm cut its dividend. How should the analyst incorporate these shocks – or should they be included at all? How can the analyst assess the risk of a company that has volatile revenues and costs and a widely varying beta? Which factors is the analysis most sensitive to? Was the market overvaluing Cal-Maine? Or, was there potential for investors to profit from investing in the firm?