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Kraft Heinz (KHC) Gains As Market Dips: What You Should Know

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Kraft Heinz (KHC) closed at $39.18 in the latest trading session, marking a +0.98% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.45%. Meanwhile, the Dow lost 0.67%, and the Nasdaq, a tech-heavy index, lost 0.05%.

Coming into today, shares of the maker of Oscar Mayer meats, Jell-O pudding and Velveeta cheese had gained 7.36% in the past month. In that same time, the Consumer Staples sector gained 0.64%, while the S&P 500 lost 1.89%.

Investors will be hoping for strength from Kraft Heinz as it approaches its next earnings release, which is expected to be July 27, 2022. The company is expected to report EPS of $0.67, down 14.1% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.38 billion, down 3.51% from the prior-year quarter.

KHC's full-year Zacks Consensus Estimates are calling for earnings of $2.69 per share and revenue of $25.61 billion. These results would represent year-over-year changes of -8.19% and -1.66%, respectively.

Any recent changes to analyst estimates for Kraft Heinz should also be noted by investors. Recent revisions tend to reflect the latest near-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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Kraft Heinz currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Kraft Heinz is currently trading at a Forward P/E ratio of 14.44. For comparison, its industry has an average Forward P/E of 18.43, which means Kraft Heinz is trading at a discount to the group.

It is also worth noting that KHC currently has a PEG ratio of 2.89. 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. The Food - Miscellaneous industry currently had an average PEG ratio of 2.81 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 75, which puts it in the top 30% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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