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Pilgrim's Pride (PPC) Stock Gains 50% in a Year: Here's Why
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Pilgrim's Pride Corporation’s (PPC - Free Report) strong performance across its core operations reflects its fundamental strengths, strategic initiatives and commitment to operational excellence. The company's success in Mexico, Europe and the United States underscores its ability to navigate challenging market conditions and capitalize on opportunities for sustained growth and profitability in the poultry and food industry.
The Zacks Rank #1 (Strong Buy) company’s shares have jumped 52.2% in the past year against the industry’s 4.2% decline.
Image Source: Zacks Investment Research
Let’s Dig Deeper
Pilgrim's Pride strengthened its business in Mexico by introducing brands and increasing investments in live operations. The (Favoritos) brand experienced impressive growth, rising 40% in the fourth quarter of 2023 from the third quarter and nearly four times since the beginning of 2023. Similarly, the unique taste brand grew almost 20% in the fourth quarter and nearly doubled since the start of 2023. The successful launch of the Just Bare fresh offering in retail further contributed to Pilgrim's Pride's positive performance.
The U.K. and European business continued to drive profitable growth through operational excellence, strengthening of key customer relationships, and the diversification of the company's branded offerings. In Mexico, the company's brand diversification efforts continued to flourish despite weakened supply and demand fundamentals.
PPC achieved profitable expansion across its diverse portfolio in the United States, with segments such as Case Ready, Small Bird, Prepared Foods and Big Bird demonstrating enhanced operational efficiencies and improved market conditions. Increased distribution, additional promotional initiatives, and widened retail pricing differentials all played pivotal roles in fostering growth across these various segments.
The foodservice distribution channel continued its recovery, with Pilgrim's Pride experiencing volume growth in value-added and commodity types across most sub-channels. Notable volume growth within the non-commercial sub-channel indicated steady demand and growth in the foodservice sector. Pilgrim's Pride's adaptability to market conditions and customer needs enabled continued growth and competitiveness in the foodservice segment.
Strategic Growth Initiatives Bode Well
PPC's commitment to organic growth was emphasized through investments that support key customer growth, such as the completion of the Athens expansion and the construction of a protein conversion facility in South Georgia, both of which are expected to contribute to profitable growth in 2024 and beyond, further demonstrating the company's focus on enhancing market competitiveness.
Apart from this, Pilgrim's Pride has been consistently increasing marketing efforts for its brands as they expand into new regions. The company regularly implements supply-chain enhancements to improve efficiency and lower costs. In this regard, Pilgrim's Pride is making significant strides in deploying automation technology within its processing plants. The adoption of this advanced technology is anticipated to boost efficiency and help address challenges related to labor availability. Moreover, the company’s dedicated efforts, including zero-base budgeting and positive impacts of acquisitions, are expected to create synergies.
The Zacks Consensus Estimate for The Chef’s Warehouse’s current fiscal-year sales and earnings suggests growth of 8.7% and 4.7%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently carries a Zacks Rank #2. VITL has a trailing four-quarter average earnings surprise of 155.4%.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings suggests growth of 18.6% and 35.6%, respectively, from the year-ago reported numbers.
Utz Brands Inc. (UTZ - Free Report) manufactures a diverse portfolio of salty snacks and currently carries a Zacks Rank #2. UTZ has a trailing four-quarter earnings surprise of 2.6%, on average.
The Zacks Consensus Estimate for Utz Brands’ current financial-year earnings suggests growth of 17.5% from the year-ago reported numbers.
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Pilgrim's Pride (PPC) Stock Gains 50% in a Year: Here's Why
Pilgrim's Pride Corporation’s (PPC - Free Report) strong performance across its core operations reflects its fundamental strengths, strategic initiatives and commitment to operational excellence. The company's success in Mexico, Europe and the United States underscores its ability to navigate challenging market conditions and capitalize on opportunities for sustained growth and profitability in the poultry and food industry.
The Zacks Rank #1 (Strong Buy) company’s shares have jumped 52.2% in the past year against the industry’s 4.2% decline.
Image Source: Zacks Investment Research
Let’s Dig Deeper
Pilgrim's Pride strengthened its business in Mexico by introducing brands and increasing investments in live operations. The (Favoritos) brand experienced impressive growth, rising 40% in the fourth quarter of 2023 from the third quarter and nearly four times since the beginning of 2023. Similarly, the unique taste brand grew almost 20% in the fourth quarter and nearly doubled since the start of 2023. The successful launch of the Just Bare fresh offering in retail further contributed to Pilgrim's Pride's positive performance.
The U.K. and European business continued to drive profitable growth through operational excellence, strengthening of key customer relationships, and the diversification of the company's branded offerings. In Mexico, the company's brand diversification efforts continued to flourish despite weakened supply and demand fundamentals.
PPC achieved profitable expansion across its diverse portfolio in the United States, with segments such as Case Ready, Small Bird, Prepared Foods and Big Bird demonstrating enhanced operational efficiencies and improved market conditions. Increased distribution, additional promotional initiatives, and widened retail pricing differentials all played pivotal roles in fostering growth across these various segments.
The foodservice distribution channel continued its recovery, with Pilgrim's Pride experiencing volume growth in value-added and commodity types across most sub-channels. Notable volume growth within the non-commercial sub-channel indicated steady demand and growth in the foodservice sector. Pilgrim's Pride's adaptability to market conditions and customer needs enabled continued growth and competitiveness in the foodservice segment.
Strategic Growth Initiatives Bode Well
PPC's commitment to organic growth was emphasized through investments that support key customer growth, such as the completion of the Athens expansion and the construction of a protein conversion facility in South Georgia, both of which are expected to contribute to profitable growth in 2024 and beyond, further demonstrating the company's focus on enhancing market competitiveness.
Apart from this, Pilgrim's Pride has been consistently increasing marketing efforts for its brands as they expand into new regions. The company regularly implements supply-chain enhancements to improve efficiency and lower costs. In this regard, Pilgrim's Pride is making significant strides in deploying automation technology within its processing plants. The adoption of this advanced technology is anticipated to boost efficiency and help address challenges related to labor availability. Moreover, the company’s dedicated efforts, including zero-base budgeting and positive impacts of acquisitions, are expected to create synergies.
3 Other Promising Stocks
The Chef’s Warehouse (CHEF - Free Report) , which engages in the distribution of specialty food products, currently carries a Zacks Rank #2 (Buy). CHEF has a trailing four-quarter earnings surprise of 3.2%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for The Chef’s Warehouse’s current fiscal-year sales and earnings suggests growth of 8.7% and 4.7%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently carries a Zacks Rank #2. VITL has a trailing four-quarter average earnings surprise of 155.4%.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings suggests growth of 18.6% and 35.6%, respectively, from the year-ago reported numbers.
Utz Brands Inc. (UTZ - Free Report) manufactures a diverse portfolio of salty snacks and currently carries a Zacks Rank #2. UTZ has a trailing four-quarter earnings surprise of 2.6%, on average.
The Zacks Consensus Estimate for Utz Brands’ current financial-year earnings suggests growth of 17.5% from the year-ago reported numbers.