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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 $35.78 in the latest trading session, marking a +1.36% move from the prior day. The stock lagged the S&P 500's daily gain of 2.6%. Elsewhere, the Dow gained 2.83%, while the tech-heavy Nasdaq lost 0.05%.

Prior to today's trading, shares of the maker of Oscar Mayer meats, Jell-O pudding and Velveeta cheese had gained 0.97% over the past month. This has outpaced the Consumer Staples sector's loss of 9.14% and the S&P 500's loss of 12.9% in that time.

Kraft Heinz will be looking to display strength as it nears its next earnings release, which is expected to be October 26, 2022. The company is expected to report EPS of $0.55, down 15.38% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.21 billion, down 1.79% from the prior-year quarter.

KHC's full-year Zacks Consensus Estimates are calling for earnings of $2.66 per share and revenue of $25.97 billion. These results would represent year-over-year changes of -9.22% and -0.29%, respectively.

Investors might also notice recent changes to analyst estimates for Kraft Heinz. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.23% lower. Kraft Heinz is currently a Zacks Rank #3 (Hold).

Looking at its valuation, Kraft Heinz is holding a Forward P/E ratio of 13.29. This represents a discount compared to its industry's average Forward P/E of 17.15.

We can also see that KHC currently has a PEG ratio of 2.66. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Food - Miscellaneous was holding an average PEG ratio of 2.47 at yesterday's closing price.

The Food - Miscellaneous industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 177, putting it in the bottom 30% 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.

To follow KHC in the coming trading sessions, be sure to utilize Zacks.com.


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