In the latest trading session, Kraft Heinz (KHC – Free Report) closed at $53.99, marking a +1.28% move from the previous day. This change outpaced the S&P 500’s 0.92% loss on the day. Elsewhere, the Dow lost 0.77%, while the tech-heavy Nasdaq lost 1.65%.
Prior to today’s trading, shares of the maker of Oscar Mayer meats, Jell-O pudding and Velveeta cheese had lost 0.95% over the past month. This has lagged the Consumer Staples sector’s gain of 0.44% and was narrower than the S&P 500’s loss of 2.56% in that time.
Investors will be hoping for strength from KHC as it approaches its next earnings release, which is expected to be February 15, 2019. In that report, analysts expect KHC to post earnings of $0.98 per share. This would mark year-over-year growth of 8.89%. Meanwhile, our latest consensus estimate is calling for revenue of $6.99 billion, up 1.65% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $3.67 per share and revenue of $26.35 billion, which would represent changes of +3.38% and +0.44%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for KHC. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.32% lower. KHC is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, KHC is currently trading at a Forward P/E ratio of 14.54. Its industry sports an average Forward P/E of 17.8, so we one might conclude that KHC is trading at a discount comparatively.
It is also worth noting that KHC currently has a PEG ratio of 2.36. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. KHC’s industry had an average PEG ratio of 2.07 as of yesterday’s close.
The Food – Miscellaneous industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 204, which puts it in the bottom 21% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.