Zacks Investment Research upgraded
Pilgrim's Pride Corporation
) to a Zacks Rank #1 (Strong Buy) on Oct 2, based on impressive
second-quarter 2013 results and a strong outlook.
Why the Upgrade?
Pilgrim's Pride reported strong results for the second quarter
of 2013, with earnings per share of 74 cents, increasing 174.1%
year over year. The increase in earnings was a result of strong
revenues as well as the company's excellent operational
Revenues for the quarter were $2.2 billion, recording a
year-over-year hike of 10.6%. Results were boosted by a demand
hike in the U.S. as well as Mexico. Adjusted earnings before
interest, taxes, depreciation and amortization increased 110.8%
year over year to $265.0 million in the second quarter.
The Zacks Consensus Estimate for 2013 has increased 33.9% in
the last 90 days to $2.21 per share and for 2014 the estimate
went up 43.5% to $2.11 per share during the same time frame.
With the third-quarter 2013 results expected soon, management
expects the second half of 2013 to be better than the first half.
Pilgrim's Pride believes that it on track to reach a level of 30%
growth in value-added exports for 2013. For the purpose, the
company launched a value-added brand - Savoro - which is expected
to enhance its presence in Middle East, Africa and Asia.
It is also expected that the feed ingredient prices will see a
drop in the fourth quarter of 2013, thereby, reducing the cost of
goods sold by the company.
Moreover, Pilgrim's Pride plans to sell its Batesville,
Ark.-based processing complex, which accounts for only 1% of the
company's revenues. The divestiture will help the company to
align its facilities with its long-term growth strategy.
Additionally, in August, the company pledged an investment of
$25.0 million in its operations in Alabama. The investment
includes $10.0 million for the overhaul of the company's
processing facility in Enterprise, along with the construction of
a feed mill facility in Pinckard.
Other Stocks to Consider
Apart from Pilgrim's Pride, other stocks in the industry with
a favorable Zacks Rank include
Amira Nature Foods Ltd.
Calavo Growers Inc.
Tyson Foods, Inc.
). While Amira Nature Foods and Calavo Growers carry a Zacks Rank
#1 (Strong Buy), Tyson Foods carries a Zacks Rank #2 (Buy).
AMIRA NATURE FD (ANFI): Free Stock Analysis
CALAVO GROWERS (CVGW): Free Stock Analysis
PILGRIMS PRIDE (PPC): Free Stock Analysis
TYSON FOODS A (TSN): Free Stock Analysis
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