Cal-Maine Foods' share price experienced a decline on this day.
Cal-Maine Foods (CALM), America's largest egg producer, has seen a recent decline in its shares, but the reasons might not be as dire as they seem. The drop in the company's stock price was primarily due to two key factors: a mechanical removal from the Russell 3000 Value Index and a pullback after an initial boost from a competitor's recall.
On June 27, 2025, Cal-Maine was excluded from the Russell 3000 Value Index during its annual reconstitution. This exclusion was based on mechanical index rules related to market capitalization and style fit rather than any fundamental weakness in Cal-Maine’s business. The removal led to some investor confusion and sell pressure, causing a dip in the stock price.
The salmonella recall by August Egg—a competitor of Cal-Maine—initially lifted Cal-Maine’s shares by nearly 4% as the market expected Cal-Maine to benefit from reduced competitor supply. However, after the initial reaction, some of those gains were given back as concerns over supply shortages eased and investors reassessed the situation. This caused shares to decline around 2.5% despite the ongoing scare affecting competitor eggs.
Despite the recent decline, Cal-Maine's fundamentals remain strong. The company is benefiting from improved gross margins due to favorable feed costs and higher egg prices resulting partly from avian flu impacts. Their gross profit and margins have surged significantly in fiscal 2025, reinforcing a robust business model.
However, analysts are cautious about 2026 earnings, which are expected to see a notable decline, possibly contributing to some market wariness.
In light of these factors, the current price decline of Cal-Maine stock may make it an attractive investment opportunity for new investors. Unless and until eggs at supermarkets significantly decrease in price, now could be a good time to buy Cal-Maine stock.
[1] MarketWatch. (2025). Cal-Maine Foods Excluded from Russell 3000 Value Index. Retrieved from https://www.marketwatch.com/story/cal-maine-foods-excluded-from-russell-3000-value-index-2025-06-27
[2] Yahoo Finance. (2025). Cal-Maine Foods Q4 Earnings: Gross Profit and Margins Surge. Retrieved from https://finance.yahoo.com/news/cal-maine-foods-q4-earnings-gross-140000523.html
[3] CNBC. (2025). Cal-Maine Foods Stock Drops After Initial Boost from Competitor’s Recall. Retrieved from https://www.cnbc.com/2025/07/01/cal-maine-foods-stock-drops-after-initial-boost-from-competitor-s-recall.html
[4] Seeking Alpha. (2025). Cal-Maine Foods Earnings Preview: Analysts Cautious About 2026 Earnings. Retrieved from https://seekingalpha.com/article/4402314-cal-maine-foods-earnings-preview-analysts-cautious-about-2026-earnings
- The decline in Cal-Maine Foods' stock price might have been influenced by its removal from the Russell 3000 Value Index, but the exclusion was based on mechanical index rules and not any fundamental weakness in the company's business.
- Despite the recent drop in Cal-Maine Foods' shares, the company's strong fundamentals remain, with improved gross margins due to favorable feed costs and higher egg prices, as indicated by the surge in their gross profit and margins in fiscal 2025.
- The current price decline of Cal-Maine Foods stock, considering the ongoing scare affecting competitor eggs and the robust business model, could make it an attractive investment opportunity for new investors, especially if eggs at supermarkets do not significantly decrease in price.
