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Kraft Heinz (KHC) Gains But Lags Market: What You Should Know

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Kraft Heinz (KHC - Free Report) closed at $37.75 in the latest trading session, marking a +0.19% move from the prior day. This move lagged the S&P 500's daily gain of 1.24%. Elsewhere, the Dow gained 1.23%, while the tech-heavy Nasdaq added 0.15%.

Heading into today, shares of the maker of Oscar Mayer meats, Jell-O pudding and Velveeta cheese had gained 2.89% over the past month, outpacing the Consumer Staples sector's loss of 5.25% and the S&P 500's loss of 2.45% in that time.

Investors will be hoping for strength from Kraft Heinz as it approaches its next earnings release. In that report, analysts expect Kraft Heinz to post earnings of $0.52 per share. This would mark a year-over-year decline of 27.78%. Our most recent consensus estimate is calling for quarterly revenue of $5.74 billion, down 10.24% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.64 per share and revenue of $24.89 billion. These totals would mark changes of -9.9% and -4.42%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Kraft Heinz. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 1.05% higher. Kraft Heinz is currently a Zacks Rank #3 (Hold).

In terms of valuation, Kraft Heinz is currently trading at a Forward P/E ratio of 14.29. Its industry sports an average Forward P/E of 19.3, so we one might conclude that Kraft Heinz is trading at a discount comparatively.

Meanwhile, KHC's PEG ratio is currently 2.86. 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 2.86 as of yesterday's close.

The Food - Miscellaneous industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 213, putting it in the bottom 17% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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