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Kraft Heinz (KHC) Gains But Lags Market: What You Should Know

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Kraft Heinz (KHC - Free Report) closed the most recent trading day at $45.37, moving +0.09% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.97%. Meanwhile, the Dow gained 1.09%, and the Nasdaq, a tech-heavy index, added 1.08%.

Prior to today's trading, shares of the maker of Oscar Mayer meats, Jell-O pudding and Velveeta cheese had lost 6.09% over the past month. This has lagged the Consumer Staples sector's loss of 4.45% and the S&P 500's loss of 3.04% in that time.

Wall Street will be looking for positivity from KHC as it approaches its next earnings report date. This is expected to be February 15, 2019. In that report, analysts expect KHC to post earnings of $0.96 per share. This would mark year-over-year growth of 6.67%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.97 billion, up 1.31% from the year-ago period.

Investors should also note any recent changes to analyst estimates for KHC. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.2% lower. KHC is currently a Zacks Rank #4 (Sell).

Digging into valuation, KHC currently has a Forward P/E ratio of 12.08. Its industry sports an average Forward P/E of 16.25, so we one might conclude that KHC is trading at a discount comparatively.

Meanwhile, KHC's PEG ratio is currently 1.96. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Food - Miscellaneous was holding an average PEG ratio of 1.96 at yesterday's closing price.

The Food - Miscellaneous industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 201, which puts it in the bottom 21% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow KHC in the coming trading sessions, be sure to utilize Zacks.com.


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