Back to top

Image: Bigstock

Kraft Heinz (KHC) Gains As Market Dips: What You Should Know

Read MoreHide Full Article

In the latest trading session, Kraft Heinz (KHC - Free Report) closed at $40.36, marking a +0.45% move from the previous day. This move outpaced the S&P 500's daily loss of 1.45%. Meanwhile, the Dow lost 1.05%, and the Nasdaq, a tech-heavy index, lost 5.88%.

Coming into today, shares of the maker of Oscar Mayer meats, Jell-O pudding and Velveeta cheese had gained 3.29% in the past month. In that same time, the Consumer Staples sector gained 1.66%, while the S&P 500 lost 1.68%.

Kraft Heinz will be looking to display strength as it nears its next earnings release. On that day, Kraft Heinz is projected to report earnings of $0.78 per share, which would represent a year-over-year decline of 1.27%. Our most recent consensus estimate is calling for quarterly revenue of $7.15 billion, up 6.63% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.70 per share and revenue of $26.28 billion. These totals would mark changes of -7.85% and +0.91%, respectively, from last year.

Any recent changes to analyst estimates for Kraft Heinz should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.05% higher. Kraft Heinz is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Kraft Heinz has a Forward P/E ratio of 14.88 right now. Its industry sports an average Forward P/E of 19.49, so we one might conclude that Kraft Heinz is trading at a discount comparatively.

Also, we should mention that KHC has a PEG ratio of 2.97. 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. Food - Miscellaneous stocks are, on average, holding a PEG ratio of 3.17 based on yesterday's closing prices.

The Food - Miscellaneous industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 55, putting it in the top 22% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Kraft Heinz Company (KHC) - free report >>

Published in