Kraft Heinz (KHC) Dips More Than Broader Markets: What You Should Know
In the latest trading session, Kraft Heinz (KHC) closed at $32.76, marking a -1.03% move from the previous day. This move lagged the S&P 500's daily loss of 0.22%. At the same time, the Dow lost 0.22%, and the tech-heavy Nasdaq lost 0.23%.
Prior to today's trading, shares of the maker of Oscar Mayer meats, Jell-O pudding and Velveeta cheese had gained 0.61% over the past month. This has lagged the Consumer Staples sector's gain of 3.59% and the S&P 500's gain of 4.87% in that time.
Investors will be hoping for strength from KHC as it approaches its next earnings release. On that day, KHC is projected to report earnings of $0.61 per share, which would represent a year-over-year decline of 31.46%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.07 billion, down 3.73% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $2.82 per share and revenue of $25.77 billion, which would represent changes of -20.11% and -1.85%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for KHC. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
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. Within the past 30 days, our consensus EPS projection has moved 4.26% 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 11.74. Its industry sports an average Forward P/E of 19.45, so we one might conclude that KHC is trading at a discount comparatively.
Meanwhile, KHC's PEG ratio is currently 2.61. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Food - Miscellaneous industry currently had an average PEG ratio of 2.37 as of yesterday's close.
The Food - Miscellaneous industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 68, putting it in the top 27% 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.
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