Kraft Heinz (KHC) Outpaces Stock Market Gains: What You Should Know

Kraft Heinz (KHC) closed at $27.77 in the latest trading session, marking a +1.2% move from the prior day. This change outpaced the S&P 500's 0.28% gain on the day. At the same time, the Dow added 0.09%, and the tech-heavy Nasdaq gained 0.4%.

Coming into today, shares of the maker of Oscar Mayer meats, Jell-O pudding and Velveeta cheese had lost 3.41% in the past month. In that same time, the Consumer Staples sector lost 0.96%, while the S&P 500 lost 0.14%.

KHC will be looking to display strength as it nears its next earnings release, which is expected to be October 31, 2019. The company is expected to report EPS of $0.55, down 29.49% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $6.15 billion, down 3.59% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.65 per share and revenue of $25.37 billion. These totals would mark changes of -24.93% and -3.38%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for KHC. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Within the past 30 days, our consensus EPS projection has moved 0.13% lower. KHC is currently a Zacks Rank #4 (Sell).

Looking at its valuation, KHC is holding a Forward P/E ratio of 10.36. Its industry sports an average Forward P/E of 18.02, so we one might conclude that KHC is trading at a discount comparatively.

Meanwhile, KHC's PEG ratio is currently 2.3. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. KHC's industry had an average PEG ratio of 2.49 as of yesterday's close.

The Food - Miscellaneous industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 156, which puts it in the bottom 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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