Will Pilgrim's Pride (PPC) Post Dismal Earnings In Q3?

Pilgrim's Pride Corporation (NASDAQ:PPC) is scheduled to report its third-quarter 2016 results after the market closes on Oct 26, 2016.

Let’s see how things are shaping up prior to this announcement.

Existing Scenario

Pilgrim’s Pride had reported weak results in the last reported quarter. The downside was attributable to negatives like outbreak of Avian Flu, high volatility in consumers’ brand loyalty, dismal economic performance in emerging markets and a stronger U.S. dollar. Factors like these might continue to hurt the company’s results in the to-be-reported quarter.

However, the adverse impact created by the above mentioned bearish aspects might be partially offset by the impressive growth initiatives undertaken by the company. For instance, Pilgrim’s Pride has started offering USDA-certified organic chicken many of its facilities for capturing the increasing demand for organic and Associated British Foods plc (LON:ABF) certified products. This strategic move is expected to support the company’s sales growth. Also, its diversified product portfolio, operational excellence and robust marketing initiatives are likely to boost results in the third quarter.

Earnings Whispers

Our proven model does not conclusively show that Pilgrim's Pride is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as we will see below.

Zacks ESP: Pilgrim's Pride currently has an Earnings ESP of 0.00%. This is because both the Zacks Consensus Estimate and the Most Accurate estimate stand at 53 cents.

Zacks Rank: Pilgrim's Pride carries a Zacks Rank #3. However, a 0.00% ESP makes surprise prediction difficult.

Note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Avon Products Inc. (NYSE:AVP) , with an Earnings ESP of +33.33% and a Zacks Rank #1.

Sanderson Farms, Inc. (NASDAQ:SAFM) , with an Earnings ESP of +9.62% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

AdvancePierre Foods Holdings, Inc. (NYSE:APFH) , with an Earnings ESP of +6.00% and a Zacks Rank #2.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>