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Strength Seen in Performance Food (PFGC): Can Its 11.8% Jump Turn into More Strength?

Performance Food Group (PFGC) shares ended the last trading session 11.8% higher at $48. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 1.3% loss over the past four weeks.

Performance Food Group has been benefiting from strength in its independent restaurants business, integration of Core-Mark and gains from new businesses. Further, recovery in theater and office coffee channels has been working well for the company. Notably, the company recently raised its adjusted EBITDA guidance for fiscal 2022, which is now anticipated in a range of $1-$1.01 billion. The guidance includes contributions from 10 months of Core-Mark business.

This food distributor is expected to post quarterly earnings of $1.04 per share in its upcoming report, which represents a year-over-year change of +85.7%. Revenues are expected to be $14.53 billion, up 56.2% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Performance Food, the consensus EPS estimate for the quarter has been revised 0.8% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on PFGC going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Performance Food is part of the Zacks Food - Natural Foods Products industry. Sprouts Farmers (SFM), another stock in the same industry, closed the last trading session 2.3% higher at $25.74. SFM has returned -3.8% in the past month.

For Sprouts Farmers, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.52. This represents no change from what the company reported a year ago. Sprouts Farmers currently has a Zacks Rank of #4 (Sell).

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