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If Pilgrim’s Pride (PPC - Free Report) is known for anything, it’s chicken. In fact, one out of every five chickens in the U.S. comes from Pilgrim’s, which counts itself as the second-largest chicken producer in world; the company has the capacity to process over 34 million birds per week, totaling more than 10 billion pounds of live chicken annually.

Headquartered in Greeley, Colorado, Pilgrim’s Pride is a Zacks Rank #1 (Strong Buy), and earnings are expected to grow almost 63% in fiscal 2017. Its recent $1 billion purchase of Moy Park, which supplies 25% of chicken consumed in western Europe, should be “immediately accretive to earnings per share.”

Impressive Third Quarter Earnings

A few weeks ago, Pilgrim’s reported better-than-expected third quarter results.

Earnings of 93 cents per share comfortably surpassed the Zacks Consensus Estimate of 77 cents per share. Net income was $232.7 million.

Revenues came in at $2.79 billion, also beating our consensus estimate and growing year-over-year. Pilgrim’s revenues from its three main regional operations improved greatly during the quarter; U.S., Mexican, and European revenues increased 12.4%, 11%, and 11%, respectively.

Operating income for the quarter was $372 million, while adjusted operating income margin for the U.S. was 16.6%. Gross margin expanded 700 basis pointed (bps) year-over-year to 17.1%.

Bullish Outlook

Overall, the U.S. Department of Agriculture expects the chicken industry to record growth next year, with demand for organic and antibiotic-free chicken products to increase.

Pilgrim’s Pride only stands to benefit from this outlook.

Going forward, the company’s Moy Park acquisition will likely help fortify its European business.

And, the successful integration of GNP Company, which they bought in January, is projected to boost PPC’s near-term profitability.

GNP is another popular name in the chicken industry, and Pilgrim’s currently projects annualized synergies of $40 million as a result of the acquisition.

Strong Growth Estimates

Not only does Pilgrim’s expect double digit earnings growth for this fiscal year, but revenues are anticipated to increase 19.5% in the same time frame.

For the current quarter, earnings and sales are projected to rise about 94% and 35%, respectively, with one analyst revising their estimate upwards in the last seven days.

Earnings estimates for 2018 are also on the rise, jumping to $2.99 per share from $2.85 per share in the last 30 days.

Will the Rally Continue?

2017 was a big year for shares of Pilgrim’s Pride. The stock has gained around 87% so far this year compared to the S&P 500’s return of 14.4%

if the chicken market continues to be as fruitful as it has been, PPC could gain even more.

Pilgrim’s Pride is now trading with a forward P/E of 12.45.

And it’s not just PPC right now either. Food-Meat Products is an overall strong industry right now, and sits in the top 9% of all industries that we cover.

But even among this impressive landscape, Pilgrim’s Pride is a standout. Thanks to its strong growth metrics and smart acquisition strategies, PPC looks to be an intriguing opportunity for investors.

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