Back to top

Analyst Blog

Zacks Investment Research upgraded Pilgrim's Pride Corporation (PPC - Snapshot Report) to a Zacks Rank #1 (Strong Buy) on Oct 2, based on impressive second-quarter 2013 results and a strong outlook.

Why the Upgrade?

Pilgrim’s Pride reported strong results for the second quarter of 2013, with earnings per share of 74 cents, increasing 174.1% year over year. The increase in earnings was a result of strong revenues as well as the company’s excellent operational performance.

Revenues for the quarter were $2.2 billion, recording a year-over-year hike of 10.6%. Results were boosted by a demand hike in the U.S. as well as Mexico. Adjusted earnings before interest, taxes, depreciation and amortization increased 110.8% year over year to $265.0 million in the second quarter.

The Zacks Consensus Estimate for 2013 has increased 33.9% in the last 90 days to $2.21 per share and for 2014 the estimate went up 43.5% to $2.11 per share during the same time frame.

With the third-quarter 2013 results expected soon, management expects the second half of 2013 to be better than the first half. Pilgrim’s Pride believes that it on track to reach a level of 30% growth in value-added exports for 2013. For the purpose, the company launched a value-added brand – Savoro – which is expected to enhance its presence in Middle East, Africa and Asia.

It is also expected that the feed ingredient prices will see a drop in the fourth quarter of 2013, thereby, reducing the cost of goods sold by the company.

Moreover, Pilgrim’s Pride plans to sell its Batesville, Ark.-based processing complex, which accounts for only 1% of the company’s revenues. The divestiture will help the company to align its facilities with its long-term growth strategy.

Additionally, in August, the company pledged an investment of $25.0 million in its operations in Alabama. The investment includes $10.0 million for the overhaul of the company’s processing facility in Enterprise, along with the construction of a feed mill facility in Pinckard.

Other Stocks to Consider

Apart from Pilgrim’s Pride, other stocks in the industry with a favorable Zacks Rank include Amira Nature Foods Ltd. (ANFI - Snapshot Report), Calavo Growers Inc. (CVGW - Snapshot Report) and Tyson Foods, Inc. (TSN - Analyst Report). While Amira Nature Foods and Calavo Growers carry a Zacks Rank #1 (Strong Buy), Tyson Foods carries a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SIGNET JEWE… SIG 116.37 +7.72%
CHYRONHEGO… CHYR 2.72 +5.84%
US SILICA H… SLCA 70.72 +4.00%
MALLINCKROD… MNK 80.11 +2.32%
RF MICRO DE… RFMD 11.76 +2.31%