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Kraft Heinz (KHC) Gains But Lags Market: What You Should Know

Kraft Heinz (KHC) closed at $32.98 in the latest trading session, marking a +0.09% move from the prior day. The stock lagged the S&P 500's daily gain of 0.35%. Elsewhere, the Dow gained 0.03%, while the tech-heavy Nasdaq added 0.7%.

Heading into today, shares of the maker of Oscar Mayer meats, Jell-O pudding and Velveeta cheese had gained 3% over the past month, lagging the Consumer Staples sector's gain of 4.9% and the S&P 500's gain of 5.14% in that time.

Wall Street will be looking for positivity from KHC as it approaches its next earnings report date. The company is expected to report EPS of $0.62, down 30.34% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.11 billion, down 3.12% from the year-ago period.

KHC's full-year Zacks Consensus Estimates are calling for earnings of $2.82 per share and revenue of $25.81 billion. These results would represent year-over-year changes of -20.11% and -1.71%, respectively.

Investors should also note any 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.

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 4.11% lower. KHC is holding a Zacks Rank of #5 (Strong Sell) right now.

Looking at its valuation, KHC is holding a Forward P/E ratio of 11.67. For comparison, its industry has an average Forward P/E of 18.54, which means KHC is trading at a discount to the group.

We can also see that KHC currently has a PEG ratio of 2.59. 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. KHC's industry had an average PEG ratio of 2.27 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 77, which puts it in the top 31% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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