Pilgrim’s Pride Society (CPC – Free Report) is likely to see growth in bottom line when it releases second quarter 2021 figures on July 28. Zacks’ consensus estimate rose 7.3% in the past 30 days to 59 cents a share. Over the period last year, the company posted breakeven results. This producer, trader, processor and distributor of fresh, frozen and value-added chicken and pork products posted a negative surprise profit of 7.3% on average over the last four quarters. In the last published quarter, Pilgrim’s Pride achieved a profit surprise of 55.6%.
Key factors to note
Pilgrim’s Pride has benefited from its efforts to strengthen the product portfolio, operational efforts and strategy of key customers. These have helped the company mitigate the impacts of difficult market conditions amid the pandemic. Strong online sales are also driving the growth of the business. When releasing first quarter 2021 results, management said it continues to see solid growth online, driven by the strength of the portfolio of ready-to-eat and prepared foods. The company then predicted that online sales would increase by around 22% over the next five years, which also bodes well for the quarter under review. Apart from that, Pilgrim’s Pride is experiencing market share gains in retail brick and mortar distribution.
The company is seeing a recovery in the restaurant industry in the United States as restrictions related to the pandemic are relaxed. The company’s retail and fast food business in the region remained strong thanks to strong demand in the last quarter. In its first quarter earnings call, management said it expects the commodities market to remain strong beyond 2021. Additionally, demand for foodservice is expected to return to levels of. before the pandemic with more vaccinations. The company’s activities in Mexico are also well placed, thanks to the normalization of the economic environment and a scenario of supply / demand balance.
That said, Pilgrim’s Pride has struggled with an increase in cost of sales in recent quarters. Direct pandemic mitigation expenses and escalating input costs are also of concern. In addition, the company’s constant investments focused on growth could have a negative impact on margins.
What the Zacks model reveals
Our proven model does not conclusively predict an increase in profits for Pilgrim’s Pride this time around. The combination of a positive earnings ESP and a Zacks # 1 (strong buy), 2 (buy) or 3 (hold) ranking increases the odds of beating the winnings. You can discover the best stocks to buy or sell before they are flagged with our ESP Earnings Filter.
Pilgrim’s Pride currently has a Rank 3 Zacks and ESP on Earnings of 0.00%.
Actions with favorable combinations
Here are a few companies you might want to consider, as our model shows they have the right mix of elements to show a beaten profit this season.
Medifast (MEDIUM – Free Report) has a Revenue ESP of + 6.85% and a Zacks Rank of 2. You can see The full list of today’s Zacks # 1 Rank stocks here.
Mondelez International (MDLZ – Free Report) has + 2.47% Revenue ESP and Zacks # 3 rank.
B&G Foods (BGS – Free Report) has a Revenue ESP of + 6.82% and a Zacks # 3 rank.