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Pilgrim's Pride (PPC) to Report Q4 Earnings: Things to Note

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Zacks Equity Research
·4 min read
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Pilgrim's Pride Corporation PPC is likely to report growth in the bottom line when it releases fourth-quarter 2020 results. The Zacks Consensus Estimate for the bottom line has remained stable in the past 30 days at 34 cents per share, which indicates substantial growth from the year-ago quarter’s reported figure of 14 cents.

However, this producer, processer, marketer and distributor of fresh, frozen and value-added chicken and pork products has a trailing four-quarter negative earnings surprise of 7.6%, on average.

Pilgrims Pride Corporation Price, Consensus and EPS Surprise

Pilgrims Pride Corporation Price, Consensus and EPS Surprise
Pilgrims Pride Corporation Price, Consensus and EPS Surprise

Pilgrims Pride Corporation price-consensus-eps-surprise-chart | Pilgrims Pride Corporation Quote

Key Factors to Note

Pilgrim's Pride is gaining from the sturdy European business. During the third quarter of 2020, revenues from European operations surged 63.4% year over year to $845.7 million, driven by robust retail demand that helped the company negate adverse impacts of lower foodservice business amid COVID-19. Also, better operational efficiencies and solid pork exports to China have been significant upsides. Moreover, improved momentum from the recently acquired European pork assets has been aiding.

Apart from these, the company’s focus on refining its portfolio alongside creating competitive advantages, especially amid the coronavirus-led disruptions, bodes well. Additionally, the company has been steadily augmenting the marketing support of its brands, as they expand and enter new regions. The company also resorts to frequent supply-chain improvements to enhance efficiency and reduce costs. In this respect, it has been progressing well with developing automation technology for its processing plants.

However, the company has been grappling with increased cost of sales for the past few quarters. Also, lower demand for foodservice products and commodity pricing volatility amid the COVID-19 pandemic have been concerning for the company’s U.S. operations. Notably, the large bird deboning category was especially challenged during the last reported quarter. Although the company is seeing a rebound in demand with impressive growth in the retail and quick-service restaurant (or QSR) business, volatility and a challenging environment in commodity segments are persistent concerns.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Pilgrim's Pride this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Pilgrim's Pride currently has a Zacks Rank #1 and an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.

Service Corporation SCI currently has an Earnings ESP of +3.68% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Newell Brands NWL has an Earnings ESP of +1.30% and a Zacks Rank #3, currently.

Monster Beverage MNST has an Earnings ESP of +21.81% and a Zacks Rank #3, at present.

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Newell Brands Inc. (NWL) : Free Stock Analysis Report

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Pilgrims Pride Corporation (PPC) : Free Stock Analysis Report

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