Zacks Investment Research upgraded Pilgrim's Pride CorporationPPC to a Zacks Rank #3 (Hold) from a Zacks Rank #4 (Sell) on Sep 14, 2016. Going by the Zacks model, stocks carrying a Zacks Rank #3 are likely to perform in line with the broader market in the quarters ahead.
Why on Hold?
Pilgrim's Pride undertakes greater product portfolio diversification to ensure that its revenues increase over time. At present, the company is trying to capture the growing market demand for natural food products. For instance, its organic and ABF chicken has been recording a rise in demand every quarter. Also, the company is strategically trying to widen its margin supported by its its unique portfolio model and zero-based budgeting strategy.
Moreover, other initiatives such as enhancement of labor efficiency, optimal water usage, methodical management of waste water and proper plant maintenance are expected to reinforce the company's productive capacity over time. Intricate product distributional strategy and specialized marketing programs are likely to generate benefits in the upcoming quarters..
Though the above bullish aspects boost our confidence toward the stock, certain inherent issues raise our concerns for the same. Persistence of several major headwinds such as sudden outbreak of a livestock disease, fall in consumers' brand loyalty or constant appreciation of the U.S. currency might limit top- and bottom-line growth prospects of the company in the near term.
Over the last 60 days, Zacks Consensus Estimate for the stock has been revised downwards for 2016 but raised higher for 2017.
PILGRIMS PRIDE Price and Consensus
Stocks to Consider
Some better-ranked stocks within the industry include Sanderson Farms, Inc. SAFM , Hormel Foods Corp. HRL and Tyson Foods, Inc. TSN . While Sanderson Farms, Inc. currently sports a Zacks Rank #1 (Strong Buy), both Hormel Foods Corporation and Tyson Foods, Inc. hold a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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