Pilgrim's Pride: A Strong Buy - Analyst Blog


Zacks Investment Research upgraded Pilgrim's Pride Corporation ( PPC ) to a Zacks Rank #1 (Strong Buy) on March 16, 2013.

Why the Upgrade?

The company's fourth quarter 2012 proved to be a solid quarter for Pilgrim's Pride considering the financial results disclosed by Pilgrim's Pride on February 14, 2013. The company's net results improved drastically from a loss of 40 cents per share in the year-ago quarter to earnings of 9 cents per share in the fourth quarter 2012. Compared with the Zacks Consensus Estimate of a loss of 8 cents, the net results improved 212.5%.

Revenue increased 19.7% year over year to $2.2 billion due to a strong product demand as well as an extra working week in the quarter.

Talking of costs, mixed results were seen as cost of sales increased by 16.9% while selling, general and administrative expenses plummeted 6.3%. The company's focus on improving its operational efficiency enabled it to realize roughly $210 million in 2012 and an additional $125 million is expected in 2013.  

Pilgrim's Pride's solid financial performances in three out of four trailing quarters, with an average positive earnings surprise of 129.3%, raise our optimism for a better quarter ahead. For the first quarter 2013, we have an Earnings ESP (Read: Zacks Earnings ESP: A Better Method ) of +69.2% while for 2013 Earnings ESP is +12.3%.    

Also, the earnings estimate for Pilgrim's Pride has gone up in the last 30 days. For 2013, the Zacks Consensus Estimate increased by 23.3% to $1.06 while that for 2014 the estimate went up 4.3% to $1.22.

Other Stocks to Consider

Pilgrim's Pride Corporation operates in the meat products industry and currently has a market capitalization of $2.3 billion. Other stocks to watch out for in the industry are Hillshire Brands Company ( HSH ), with a Zacks Rank #1 (Strong Buy) and Hormel Foods Corporation ( HRL ) and Tyson Foods, Inc. ( TSN ), each with a Zacks Rank #2 (Buy).

HORMEL FOODS CP (HRL): Free Stock Analysis Report

HILLSHIRE BRAND (HSH): Free Stock Analysis Report

PILGRIMS PRIDE (PPC): Free Stock Analysis Report

TYSON FOODS A (TSN): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: HRL , HSH , PPC , TSN



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