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Pilgrim's Pride (PPC) Looks Good on Robust Growth Drivers

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On Nov 15, we issued an updated research report on the premium consumer goods company Pilgrim's Pride Corporation (PPC - Free Report) .

Over the last month, we notice that shares of this Zacks Rank #1 (Strong Buy) stock have yielded a return of 16.7%, outperforming 6.8% growth recorded by the industry.

Notably, the stock currently carries an attractive VGM Score of A.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Bullish Factors at Play

The United States Department of Agriculture predicts that the chicken industry in the county will record remarkable growth in 2018. Moreover, demand for organic and antibiotic-free chicken products is anticipated to shoot up, going forward. We believe these positives will boost the revenues and profitability of all chicken product-offering companies in the United States, such as Pilgrim's Pride, Tyson Foods, Inc. (TSN - Free Report) , Hormel Foods Corporation (HRL - Free Report) and Sanderson Farms, Inc. (SAFM - Free Report) .

However, Pilgrim's Pride is poised to boost its competency on the back of a unique portfolio strategy. Through this strategy, the company intends to capture the market upside, minimize business risk and widen margin. In sync with this, Pilgrim's Pride maintains a well-balanced portfolio of multiple bird sizes and expands business in diversified geographical end markets.

Pilgrim's Pride believes favorable prices (backed by stronger overseas exports) and elevated demand will bolster its U.S. revenues in the quarters ahead. Also, rising per capita income levels and improving dietary habits of individuals will likely strengthen the company’s Mexican business in the near term.

Furthermore, the latest Moy Park buyout (September 2017) will fortify the company’s European business going forward.

Also, Pilgrim's Pride stated that the successful integration of GNP Company (January 2017) will continue to drive sales and generate additional synergies, going forward. Notably, Pilgrim's Pride currently estimates to realize annualized synergies of $40 million as a result of this buyout, which is higher than the prior projection of $30 million.

The company is also optimistic about its latest product launches and even believes that investments incurred to improve its production capability will prove beneficial over the long run.    

Over the last 60 days, the Zacks Consensus Estimate for the stock moved up for both 2017 and 2018, reflecting positive market sentiments.

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