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Why Pilgrim's Pride is a Must-Add Stock to Your Portfolio?
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The save-haven consumer staples sector (including food and beverage stocks) has made investors skeptical.
A sound U.S. economic picture and an upbeat consumer confidence data are anticipated to benefit the stocks in this sector. However, these companies have been countering several challenges like intense competition, food deflation, input cost inflation and tight margins.
Hence, we realize that grabbing the potential winners in this space is not an easy task at the moment.
Zacks Counsel
We believe adding Pilgrim's Pride Corporation (PPC - Free Report) to your portfolio would be a safe investment harbor at the moment.
On a year-to-date basis, this Zacks Rank #1 (Strong Buy) stock has yielded a return of 64.9%, outperforming 28.3% growth recorded by the industry.
Notably, the attractiveness of this stock as a current investment choice is further accentuated by its favorable VGM Score A.
Reasons for the Solid Run
Revenue Growth: Pilgrim's Pride’s revenues have been improving for the last three quarters.
In third-quarter 2017, the company’s top-line results came in 12% higher than the year-ago tally and also surpassed the Zacks Consensus Estimate by 23.2%. Elevated U.S. chicken demand and favorable prices (backed by higher U.S. chicken exports) are anticipated to bolster the company’s U.S. revenues. Also, rise in per capita income levels and improving dietary habits are likely to drive near-term sales in the Mexican end markets. Moreover, higher sales from the new European operations are expected to aid the company’s revenue growth trajectory.
Notably, Pilgrim's Pride’s stated that growth of the U.S. chicken industry in 2018 (predicted by the United States Department of Agriculture) will likely help in augmenting its aggregate revenues in the quarters ahead. The stock’s projected sales growth for 2017 and 2018 are currently pegged at 19.6% and 13.5%, respectively.
Margin Improvement: Margin growth has been impressive for Pilgrim's Pride for the last trailing quarters. The company’s gross profit margin expanded 700 basis points (bps) year over year in the third quarter, on the back of its unique portfolio strategy. In sync with this strategy, the company maintains a well-balanced portfolio of multiple bird sizes and expands business in diversified geographical end markets.
We believe the portfolio strategy will help widen Pilgrim's Pride’s margins over the long term.
Earnings Per Share Growth: Pilgrim's Pride recorded an average positive earnings surprise of 1.53% over the preceding four quarters. The company’s earnings in the third-quarter 2017 surpassed the year-earlier figure by 139% and also outpaced the Zacks Consensus Estimate by 27.3%. The company intends to report better-than-expected bottom-line results in the quarters ahead, on the back of sturdy revenue growth, greater operational efficacy and lower costs.
Acquisition Based Growth:Pilgrim's Pride has been gradually strengthening its competency on the back of strategic business acquisitions. For instance, the GNP Company acquisition (January 2017) is anticipated to bolster the company's sales in the upcoming quarters. 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. Additionally, the Moy Park buyout (September 2017) is likely to boost the company’s European business. The company expects to secure synergies worth $50 million over the next two years with the Moy Park acquisition.
Upward Estimate Revisions: Over the past 60 days, the Zacks Consensus Estimate for Pilgrim's Pride moved up 9.6% to $2.85 for 2017 and 4.9% to $2.99 for 2018. The positive earnings estimate revisions indicate analysts’ confidence for the stock.
Notably, the stock’s projected earnings per share (EPS) growth for 2017 and 2018 are currently pegged at 62.7% and 5.1%, respectively.
Other Stocks to Consider
Some other top-ranked stocks in the same space are listed below:
US Foods Holding Corp. (USFD - Free Report) also carries a Zacks Rank of 2. The company’s EPS is projected to rise 15.1% over the next three to five years.
Flowers Foods, Inc. (FLO - Free Report) has a Zacks Rank of 2. The company’s EPS is estimated to be up 6.1% during the same time frame.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Why Pilgrim's Pride is a Must-Add Stock to Your Portfolio?
The save-haven consumer staples sector (including food and beverage stocks) has made investors skeptical.
A sound U.S. economic picture and an upbeat consumer confidence data are anticipated to benefit the stocks in this sector. However, these companies have been countering several challenges like intense competition, food deflation, input cost inflation and tight margins.
Hence, we realize that grabbing the potential winners in this space is not an easy task at the moment.
Zacks Counsel
We believe adding Pilgrim's Pride Corporation (PPC - Free Report) to your portfolio would be a safe investment harbor at the moment.
On a year-to-date basis, this Zacks Rank #1 (Strong Buy) stock has yielded a return of 64.9%, outperforming 28.3% growth recorded by the industry.
Notably, the attractiveness of this stock as a current investment choice is further accentuated by its favorable VGM Score A.
Reasons for the Solid Run
Revenue Growth: Pilgrim's Pride’s revenues have been improving for the last three quarters.
In third-quarter 2017, the company’s top-line results came in 12% higher than the year-ago tally and also surpassed the Zacks Consensus Estimate by 23.2%.
Elevated U.S. chicken demand and favorable prices (backed by higher U.S. chicken exports) are anticipated to bolster the company’s U.S. revenues. Also, rise in per capita income levels and improving dietary habits are likely to drive near-term sales in the Mexican end markets. Moreover, higher sales from the new European operations are expected to aid the company’s revenue growth trajectory.
Notably, Pilgrim's Pride’s stated that growth of the U.S. chicken industry in 2018 (predicted by the United States Department of Agriculture) will likely help in augmenting its aggregate revenues in the quarters ahead.
The stock’s projected sales growth for 2017 and 2018 are currently pegged at 19.6% and 13.5%, respectively.
Margin Improvement: Margin growth has been impressive for Pilgrim's Pride for the last trailing quarters. The company’s gross profit margin expanded 700 basis points (bps) year over year in the third quarter, on the back of its unique portfolio strategy. In sync with this strategy, the company maintains a well-balanced portfolio of multiple bird sizes and expands business in diversified geographical end markets.
We believe the portfolio strategy will help widen Pilgrim's Pride’s margins over the long term.
Earnings Per Share Growth: Pilgrim's Pride recorded an average positive earnings surprise of 1.53% over the preceding four quarters. The company’s earnings in the third-quarter 2017 surpassed the year-earlier figure by 139% and also outpaced the Zacks Consensus Estimate by 27.3%. The company intends to report better-than-expected bottom-line results in the quarters ahead, on the back of sturdy revenue growth, greater operational efficacy and lower costs.
Acquisition Based Growth: Pilgrim's Pride has been gradually strengthening its competency on the back of strategic business acquisitions. For instance, the GNP Company acquisition (January 2017) is anticipated to bolster the company's sales in the upcoming quarters. 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. Additionally, the Moy Park buyout (September 2017) is likely to boost the company’s European business. The company expects to secure synergies worth $50 million over the next two years with the Moy Park acquisition.
Upward Estimate Revisions: Over the past 60 days, the Zacks Consensus Estimate for Pilgrim's Pride moved up 9.6% to $2.85 for 2017 and 4.9% to $2.99 for 2018. The positive earnings estimate revisions indicate analysts’ confidence for the stock.
Notably, the stock’s projected earnings per share (EPS) growth for 2017 and 2018 are currently pegged at 62.7% and 5.1%, respectively.
Other Stocks to Consider
Some other top-ranked stocks in the same space are listed below:
Medifast, Inc. (MED - Free Report) holds a Zacks Rank of 2 (Buy), at present. The company’s EPS is projected to be up 15% in the next three to five years. You can see the complete list of today’s Zacks #1 Rank stocks here.
US Foods Holding Corp. (USFD - Free Report) also carries a Zacks Rank of 2. The company’s EPS is projected to rise 15.1% over the next three to five years.
Flowers Foods, Inc. (FLO - Free Report) has a Zacks Rank of 2. The company’s EPS is estimated to be up 6.1% during the same time frame.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>