The Kraft Heinz Company (KHC Quick QuoteKHC - Free Report) is likely to witness year-over-year growth in top and bottom lines, when it reports first-quarter 2021 numbers on Apr 29. The Zacks Consensus Estimate for revenues is pegged at $6,295 million, which suggests growth of 2.2% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for earnings has declined a cent in the past seven days to 59 cents per share, which indicates an increase of 1.7% from the year-ago quarter’s reported figure. Markedly, this manufacturer and marketer of food and beverage products has a trailing four-quarter earnings surprise of 12.9%, on average. In the last reported quarter, the company delivered an earnings surprise of 8.1%.

Key Factors to Note

Kraft Heinz has been gaining from rising demand amid COVID-led higher at-home consumption, which has been boosting its retail business. Also, favorable pricing has been a driver, which was up 4.8 percentage points in the fourth quarter of 2020. During the quarter, top and bottom lines grew year over year on the back of solid performance in the United States and International business segments.

Kraft Heinz, on its last earnings call, projected organic net sales growth in the range of flat to positive for first-quarter 2021. Further, the company anticipates low-single-digit constant-currency adjusted EBITDA growth during the quarter under review. It further stated that this view takes into account comparison with the robust first-quarter 2020, which benefited from solid consumer demand due to the pandemic. Moreover, Kraft Heinz continues to anticipate the 2021 financial performance to be ahead of its strategic plan.

Notably, Kraft Heinz is working toward its long-term goals, which were unveiled in September 2020. These goals reflect the company’s strategic review, business reorientation as well as strength in its ongoing turnaround. Additionally, Kraft Heinz’s new operating model, which incorporates five key elements — People with Purpose, Consumer Platforms, Ops Center, Partner Program and Fuel Our Growth — bodes well.

That being said, the company is seeing a rise in selling, general and administrative expenses, excluding impairment losses, for a while now. Apart from these, Kraft Heinz is incurring increased supply-chain costs, including pandemic-induced expenses, higher incentive compensation as well as significant investments in marketing and sales. Also, soft sales in the company’s Canada segment is a concern.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Kraft Heinz this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Kraft Heinz currently has a Zacks Rank #3 and an Earnings ESP of -1.93%.

Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.

Archer Daniels Midland Company (ADM Quick QuoteADM - Free Report) currently has an Earnings ESP of +2.30% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Medifast (MED Quick QuoteMED - Free Report) has an Earnings ESP of +6.25% and a Zacks Rank #3, currently.

Monster Beverage Corporation (MNST Quick QuoteMNST - Free Report) has an Earnings ESP of +0.41% and a Zacks Rank #3, at present.

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