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Pilgrim's Pride (PPC) Q2 Earnings: What's in the Cards?

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Pilgrim's Pride Corporation (PPC - Free Report) will report second-quarter 2017 results on Aug 2, after the market closes.

Over the last one month, Pilgrim's Pride’s shares yielded a return of 10.59%, outperforming 2.26% growth recorded by the industry.

Notably, the attractiveness of this stock as a current investment choice is further accentuated by its favorable Value Growth and Momentum Style Score ‘A’.

However, the company missed estimates in all of the trailing four quarters, witnessing an average negative earnings surprise of 17.52%. Let’s see how things are shaping up prior to this announcement.

Factors to Play

Increased demand for organic and Antibiotic-Free chicken products is anticipated to bolster Pilgrim's Pride’s revenues in the to-be-reported quarter. Notably, the company believes that its unique product diversification strategy would aid in capturing greater proportion of market demand share in the second quarter.

Additionally, Pilgrim's Pride’s affirmed that the successful integration activities of its GNP Company (acquired in Jan 2017) would continue to bring synergies and even help in enhancing its product portfolio through the launch of combined products (like the Gold'n Plump Just Bare Chicken).  

Nevertheless, we notice that over the last 60 days, the Zacks Consensus Estimate for the stock moved south for both 2017 and 2018, reflecting negative sentiments. We believe that headwinds such as input price inflations, unfavorable foreign currency translation impact or stiff industry rivalry might dent the company’s growth in the quarter to be reported.

Earnings Whispers

Our proven model does not conclusively show that Pilgrim's Pride will likely beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. That is not the case here as we will see below.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks ESP: Pilgrim's Pride currently has an Earnings ESP of 0.00%. This is because both the Zacks Consensus Estimate and the Most Accurate estimate are pegged at 81 cents.

Zacks Rank: Pilgrim's Pride carries a favorable Zacks Rank #3. However, the company’s Earnings ESP of 0.00% makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Key Picks

Here are some stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Coca-Cola European Partners PLC (CCE - Free Report) , with an Earnings ESP of +4.69% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kellogg Company (K - Free Report) , with an Earnings ESP of +2.17% and a Zacks Rank #2.

Nu Skin Enterprises, Inc. (NUS - Free Report) , with an Earnings ESP of +2.86% and a Zacks Rank #2.

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