Pilgrim's Pride stock is the IBD Stock Of The Day as it flashes a bullish signal while working on a buy point, with the bird flu driving up chicken prices.
Pilgrim's Pride produces nearly one out of every five chickens sold in the U.S. It partners with 4,900 family farms for poultry and 6,300 family farms for hog and lamb supplies.
On Monday, rival Tyson Foods raised revenue outlook after quarterly earnings easily beat views, as consumers accept food price hikes.
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IBD 50 Stock With Perfect Composite Rating
Pilgrim's stock belongs to the IBD 50 list of top growth stocks.
On April 29, IBD flagged PPC stock as its IBD Composite Rating climbed to 97. The Comp rating combines key fundamental and technical metrics in a single easy-to-use score. It now earns a perfect Composite score of 99.
In addition, PPC stock shows a superior Relative Strength Rating of 92 out of 99, meaning it has outperformed 92% of all stocks over the past year.
A consumer staples stock like the owner of Pilgrim's, Just Bare and Gold'n Plump brands can cushion portfolios in a tough stock market.
Tyson Earnings: Rising Prices Offset Higher Costs
On Monday, rival Tyson Foods easily beat earnings and sales views. Tyson earnings jumped in the March quarter, accelerating for a second straight quarter. Revenue increased 16%, slowing from a 24% gain the prior quarter. The company raised its revenue outlook.
Chicken prices rose 14% in the quarter ended April 2, Tyson Foods said Monday, according to Bloomberg. Pork prices increased 11% and beef prices jumped 24%.
Costs are being watched. Tyson Foods warned Monday about inflationary headwinds across livestock, animal feed, freight and labor, but has so far managed to pass rising costs to consumers.
Earlier in April, Pilgrim's, too, warned on higher input and operating costs.
PPC Stock Technical Analysis
Shares of Pilgrim's Pride fell 2.7% to 28.39 amid a broad sell-off on the stock market today, but did bounce off its 21-day line. Pilgrim's Pride stock sits 6% below a 29.60 handle buy point in a cup base. The entry is a dime above the April 29 high.
The relative strength line for PPC stock is making a new high, marked by a blue dot at the end of that strength indicator on the weekly chart. In fact, the RS line has risen to a 23-month peak, though it's well below all-time highs, according to MarketSmith chart analysis. A rising RS line means that a stock is outperforming the S&P 500.
Pilgrim's 99 Comp Rating helps to make it the No. 1 stock in the Food-Meat Products industry group.
Tyson Foods stock gained 2.2% to 92.84 on Monday, reclaiming its 50-day line. Its RS line also is at a high. TSN stock sits 8% below a 99.64 cup-with-handle entry.
Tyson bears a 92 Composite Rating and 91 RS Rating. The meat products industry group ranks a strong No. 37 out of 197 industry groups tracked by IBD.
Pilgrim's Pride Earnings And Fundamental Analysis
Pilgrim's Pride earns an EPS Rating of 79 out of 99.
In April, the poultry and pork producer reported that earnings vaulted 181% in the March quarter, accelerating from gains of 124% and 1.5% during the prior two quarters. Revenue jumped 30% in the March quarter. Sales in the food service business improved, returning to pre-pandemic volumes, while retail volumes stayed strong, the company said.
More challenging quarters loom. In all of 2022, analysts polled by FactSet expect Pilgrim's earnings to jump 45% as sales increase 17%. In 2023, they expect Pilgrim earnings to decline 6% as sales growth slows to 2%.
Pilgrim's earnings rebounded 124% in 2021 after collapsing 37% the prior year.
PPC stock shows one quarter of rising fund ownership, according to the IBD Stock Checkup tool. Some 426 funds owned Pilgrim's Pride stock as of March, up from 423 in December 2021 but down from 432 in June 2021.
