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PPC Shares Gain More Than 65% YTD: Is the Stock Still Worth Buying?
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Pilgrim's Pride Corporation (PPC - Free Report) has demonstrated impressive performance in the stock market, with its shares rallying a solid 65.6% year to date, outpacing the Zacks Food - Meat Products industry's growth of 18.9%. The meat products company has also surpassed the broader Consumer Staples sector’s increase of 9.1% and the S&P 500, which grew by 18.4% during the same timeframe.
Closing at $45.81 on Tuesday, the stock stands close to its recently achieved 52-week high of $47.44, indicating impressive momentum.
Pilgrim's Pride’s recent success stems from its effective portfolio diversification strategies, including a strong emphasis on branded products and key customer partnerships. The company is leveraging growth in the foodservice sector and benefiting from substantial investments in expansion and operational efficiencies.
The impressive uptick in PPC’s stock has left many investors wondering if they missed out on a lucrative opportunity or if there is still potential for growth. Let’s explore the underlying growth opportunities that could influence Pilgrim's Pride’s future performance.
Image Source: Zacks Investment Research
Discovering Growth Potential for Pilgrim's Pride
Pilgrim's Pride’s growth is driven by its portfolio diversification, emphasizing branded products and strategic customer partnerships. The company's focus on key clients refines its portfolio and builds competitive advantages. Strategic investments in new U.S. and Mexican facilities, including expanded capacities, bolster growth and operational efficiency. Enhanced operational practices and a positive market environment for private brands further support performance.
In the second quarter of 2024, Pilgrim's Pride saw increased volume and revenue in foodservice distribution, with commercial channels benefiting from higher fresh wholesale prices. The quick-service restaurant sector contributed to volume growth, reflecting consumer demand for affordable meals. The non-commercial sector also showed steady growth due to increased industry activity.
Pilgrim's Pride continues to enhance growth through investments in expansion and efficiency, including new facilities and cost-cutting measures. The company's focus on optimizing processes, reducing grain costs, and strengthening customer partnerships drives profitability and aligns with evolving consumer preferences for value-added and prepared foods.
PPC’s Value Proposition: A Bargain or Premium?
With Pilgrim's Pride trading at a forward 12-month P/E multiple of 9.56X, significantly below the industry average of 15.98X, the stock appears undervalued and may offer a compelling buying opportunity. This lower valuation hints at potential upside for investors, assuming the company maintains its strong performance.
Investors Guide for PPC
PPC’s robust performance stems from its effective portfolio diversification, strategic investments in expansion and operational efficiency, and significant growth in the foodservice sector. Sporting a Zacks Rank #1 (Strong Buy), PPC is well-positioned for ongoing growth, making it an attractive option for investors looking for value and growth potential.
Other Solid Food Stocks
Here, we have highlighted three other top-ranked food stocks, namely, The Chef's Warehouse (CHEF - Free Report) , Ollie's Bargain Outlet (OLLI - Free Report) and Flowers Foods, Inc. (FLO - Free Report) .
CHEF has a trailing four-quarter earnings surprise of 33.7%, on average. The Zacks Consensus Estimated figure for The Chef’s Warehouse’s current fiscal year sales and earnings indicates growth of 9.7% and 12.6%, respectively, from the year-ago reported numbers.
Ollie's Bargain, the extreme-value retailer of brand-name merchandise, currently carries a Zacks Rank #2 (Buy). OLLI has a trailing four-quarter earnings surprise of 7.9%, on average.
The Zacks Consensus Estimated figure for Ollie's Bargain’s current financial-year sales and earnings indicates a rise of around 8.1% and 12.71%, respectively, from the year-earlier levels.
Flowers Foods, one of the largest producers of packaged bakery foods in the United States, currently carries a Zacks Rank #2. FLO has a trailing four-quarter earnings surprise of 1.9%, on average.
The Zacks Consensus Estimate for Flowers Foods’ current financial-year sales and earnings calls for growth of around 1.1% and 4.2%, respectively, from the year-ago reported numbers.
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PPC Shares Gain More Than 65% YTD: Is the Stock Still Worth Buying?
Pilgrim's Pride Corporation (PPC - Free Report) has demonstrated impressive performance in the stock market, with its shares rallying a solid 65.6% year to date, outpacing the Zacks Food - Meat Products industry's growth of 18.9%. The meat products company has also surpassed the broader Consumer Staples sector’s increase of 9.1% and the S&P 500, which grew by 18.4% during the same timeframe.
Closing at $45.81 on Tuesday, the stock stands close to its recently achieved 52-week high of $47.44, indicating impressive momentum.
Pilgrim's Pride’s recent success stems from its effective portfolio diversification strategies, including a strong emphasis on branded products and key customer partnerships. The company is leveraging growth in the foodservice sector and benefiting from substantial investments in expansion and operational efficiencies.
The impressive uptick in PPC’s stock has left many investors wondering if they missed out on a lucrative opportunity or if there is still potential for growth. Let’s explore the underlying growth opportunities that could influence Pilgrim's Pride’s future performance.
Image Source: Zacks Investment Research
Discovering Growth Potential for Pilgrim's Pride
Pilgrim's Pride’s growth is driven by its portfolio diversification, emphasizing branded products and strategic customer partnerships. The company's focus on key clients refines its portfolio and builds competitive advantages. Strategic investments in new U.S. and Mexican facilities, including expanded capacities, bolster growth and operational efficiency. Enhanced operational practices and a positive market environment for private brands further support performance.
In the second quarter of 2024, Pilgrim's Pride saw increased volume and revenue in foodservice distribution, with commercial channels benefiting from higher fresh wholesale prices. The quick-service restaurant sector contributed to volume growth, reflecting consumer demand for affordable meals. The non-commercial sector also showed steady growth due to increased industry activity.
Pilgrim's Pride continues to enhance growth through investments in expansion and efficiency, including new facilities and cost-cutting measures. The company's focus on optimizing processes, reducing grain costs, and strengthening customer partnerships drives profitability and aligns with evolving consumer preferences for value-added and prepared foods.
PPC’s Value Proposition: A Bargain or Premium?
With Pilgrim's Pride trading at a forward 12-month P/E multiple of 9.56X, significantly below the industry average of 15.98X, the stock appears undervalued and may offer a compelling buying opportunity. This lower valuation hints at potential upside for investors, assuming the company maintains its strong performance.
Investors Guide for PPC
PPC’s robust performance stems from its effective portfolio diversification, strategic investments in expansion and operational efficiency, and significant growth in the foodservice sector. Sporting a Zacks Rank #1 (Strong Buy), PPC is well-positioned for ongoing growth, making it an attractive option for investors looking for value and growth potential.
Other Solid Food Stocks
Here, we have highlighted three other top-ranked food stocks, namely, The Chef's Warehouse (CHEF - Free Report) , Ollie's Bargain Outlet (OLLI - Free Report) and Flowers Foods, Inc. (FLO - Free Report) .
The Chef’s Warehouse, which engages in the distribution of specialty food products, currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
CHEF has a trailing four-quarter earnings surprise of 33.7%, on average. The Zacks Consensus Estimated figure for The Chef’s Warehouse’s current fiscal year sales and earnings indicates growth of 9.7% and 12.6%, respectively, from the year-ago reported numbers.
Ollie's Bargain, the extreme-value retailer of brand-name merchandise, currently carries a Zacks Rank #2 (Buy). OLLI has a trailing four-quarter earnings surprise of 7.9%, on average.
The Zacks Consensus Estimated figure for Ollie's Bargain’s current financial-year sales and earnings indicates a rise of around 8.1% and 12.71%, respectively, from the year-earlier levels.
Flowers Foods, one of the largest producers of packaged bakery foods in the United States, currently carries a Zacks Rank #2. FLO has a trailing four-quarter earnings surprise of 1.9%, on average.
The Zacks Consensus Estimate for Flowers Foods’ current financial-year sales and earnings calls for growth of around 1.1% and 4.2%, respectively, from the year-ago reported numbers.