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Kraft Heinz (KHC) Outpaces Stock Market Gains: What You Should Know
Kraft Heinz (KHC - Free Report) closed at $37.70 in the latest trading session, marking a +0.8% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.3%. Elsewhere, the Dow gained 0.46%, while the tech-heavy Nasdaq lost 0.09%.
Heading into today, shares of the maker of Oscar Mayer meats, Jell-O pudding and Velveeta cheese had gained 0.16% over the past month, outpacing the Consumer Staples sector's loss of 2.26% and the S&P 500's loss of 4.13% in that time.
Wall Street will be looking for positivity from Kraft Heinz as it approaches its next earnings report date. The company is expected to report EPS of $0.60, down 7.69% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.24 billion, down 1.26% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.68 per share and revenue of $25.94 billion. These totals would mark changes of -8.53% and -0.38%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Kraft Heinz. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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 remained stagnant. Kraft Heinz is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, Kraft Heinz is currently trading at a Forward P/E ratio of 13.97. For comparison, its industry has an average Forward P/E of 18.96, which means Kraft Heinz is trading at a discount to the group.
Meanwhile, KHC's PEG ratio is currently 2.79. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Food - Miscellaneous stocks are, on average, holding a PEG ratio of 2.79 based on yesterday's closing prices.
The Food - Miscellaneous industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 89, putting it in the top 36% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
You can find more information on all of these metrics, and much more, on Zacks.com.