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

Zacks Equity Research
In the latest trading session, Flexible Solutions International (FSI) closed at $4.20, marking a +0.72% move from the previous day.

In the latest trading session, Kraft Heinz (KHC) closed at $32.44, marking a +0.11% move from the previous day. The stock lagged the S&P 500's daily gain of 0.89%. At the same time, the Dow added 0.84%, and the tech-heavy Nasdaq gained 0.97%.

Prior to today's trading, shares of the maker of Oscar Mayer meats, Jell-O pudding and Velveeta cheese had lost 1.49% over the past month. This has lagged the Consumer Staples sector's gain of 1.24% and was narrower than the S&P 500's loss of 1.68% in that time.

Wall Street will be looking for positivity from KHC as it approaches its next earnings report date. In that report, analysts expect KHC to post earnings of $0.60 per share. This would mark a year-over-year decline of 32.58%. Meanwhile, our latest consensus estimate is calling for revenue of $6.08 billion, down 3.49% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.82 per share and revenue of $25.85 billion, which would represent changes of -20.11% and -1.55%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for KHC. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate has moved 0.03% higher within the past month. KHC is currently a Zacks Rank #3 (Hold).

In terms of valuation, KHC is currently trading at a Forward P/E ratio of 11.49. Its industry sports an average Forward P/E of 19.78, so we one might conclude that KHC is trading at a discount comparatively.

We can also see that KHC currently has a PEG ratio of 3.13. 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. The Food - Miscellaneous was holding an average PEG ratio of 2.38 at yesterday's closing price.

The Food - Miscellaneous industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 169, which puts it in the bottom 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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