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Why Kraft Heinz (KHC) Dipped More Than Broader Market Today

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Kraft Heinz (KHC - Free Report) closed at $25.81 in the latest trading session, marking a -3.48% move from the prior day. This move lagged the S&P 500's daily loss of 0.5%. On the other hand, the Dow registered a loss of 0.38%, and the technology-centric Nasdaq decreased by 0.5%.

The processed food company with dual headquarters in Pittsburgh and Chicago's stock has dropped by 4.12% in the past month, falling short of the Consumer Staples sector's loss of 3.92% and the S&P 500's gain of 2.74%.

The investment community will be closely monitoring the performance of Kraft Heinz in its forthcoming earnings report. In that report, analysts expect Kraft Heinz to post earnings of $0.58 per share. This would mark a year-over-year decline of 22.67%. In the meantime, our current consensus estimate forecasts the revenue to be $6.27 billion, indicating a 1.72% decline compared to the corresponding quarter of the prior year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $2.58 per share and revenue of $25.24 billion, which would represent changes of -15.69% and -2.35%, respectively, from the prior year.

Any recent changes to analyst estimates for Kraft Heinz should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.16% lower. At present, Kraft Heinz boasts a Zacks Rank of #3 (Hold).

From a valuation perspective, Kraft Heinz is currently exchanging hands at a Forward P/E ratio of 10.38. This denotes a discount relative to the industry average Forward P/E of 15.51.

We can also see that KHC currently has a PEG ratio of 3.12. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Food - Miscellaneous industry held an average PEG ratio of 1.8.

The Food - Miscellaneous industry is part of the Consumer Staples sector. With its current Zacks Industry Rank of 165, this industry ranks in the bottom 34% of all industries, numbering over 250.

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.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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