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Pilgrim's Pride (NASDAQ:PPC) recently crushed earnings and still has a very strong outlook. It is a Zacks Rank No. 1 (Strong Buy). It is the Bull of the Day.

I (Still) Feel Like Chicken Tonight

I wrote about PPC a little over a month ago as the Bull of the Day. Since PPC was the Bull of the Day back in July, it has appreciated more than 10% and posted some solid earnings. With a 19% share of the domestic market, Pilgrim's Pride has a firm grip on second place behind Tyson's 22%. The 36 million bird weekly capacity also tells you that plenty of people are eating chicken.

Company Description

Pilgrim's Pride produces, processes and markets fresh, frozen, and value-added chicken products in the United States, Mexico, and Puerto Rico. The company was founded in 1945 and is headquartered in Greeley, Colo. As of Dec. 28, 2009, Pilgrim's Pride operates as a subsidiary of JBS USA Holdings, Inc.

Earnings History

Looking to the earnings history, we see a stock that has beaten the number in three of the last four most recent reports. The most recent quarter was a big beat. The company reported earnings of $0.74 on July 31 when the Zacks Consensus Estimate stood at $0.56. That translates into a beat of $0.18, or a positive earnings surprise of more than 32%. In the session following the report, the stock increased by 9%.

Not a Small Chicken

PPC has approximately 37,500 employees and 30 hatcheries. They also have 3,900 growers and 26 feed mills with production facilities throughout the Southeast of the United States, Mexico, and Puerto Rico. The company sells to a wide range of food service companies like U.S. Foodservice, Yum Brands, Wendy's, Burger King, and ConAgra Foods. on the retail side, PCC sells to grocers like Wal-Mart, Publix, Kroger, and SuperValu among others.

Earnings Estimates Tick Higher

Estimates for FY 2013 have been moving higher and higher. The 2013 calendar year started out with the Zacks Consensus sitting at $0.86, but that number jumped to $1.31 in April, and then again to $1.49 in May and now sits at $2.01. That is some excellent growth of more than 100% in just seven months.

The picture for 2014 is showing more of the same excellent potential. The Zacks Consensus for next year started the year at $1.18 and ticked higher to $1.22 in April. A big move up to $1.41 the following month and a subsequent move to $1.92 at the current level.

Valuation

The valuation picture for PPC is looking better and better. Last time I wrote on PPC, they had a 20.8x trailing P/E and a 9.3x forward P/E. Well those numbers look even better right now, with a 14.1x trailing earnings multiple and an 8.5x forward multiple. Both compare favorably to the 19.8x and 18.2x industry averages for trailing and forward multiples. The price to book shrunk from 4.1x to 3.7x and is now below the industry average of 3.8x. Price to sales of 0.5x held steady over the last month or so.

A solid quarter and a mild pullback in the stock will do wonders to a valuation picture -- and that is just what has happened to PPC.

The Chart

I recommended PPC prior to its earnings release on July 12 in the Bull of the Day article. The release on July 31 caused the stock to pop by 9% on Aug. 1, the day following the report. After that, the stock drifted higher to a new 52-week high of $19.23, quite a move from the $15.93 close of July 12. A pullback in price, particularly occurring on Aug. 16 (-11%), has sent the stock back down below $17. If I learned one thing from listening to the conference calls for both PPC and its major competitor TSN, I know that chicken still has a great outlook over the next several months due to the laws of supply and demand. That alone should make you take another look at this stock.

Pilgrim's Pride: Free Stock Analysis Report (email registration required)

Source: Bull Of The Day: Pilgrim's Pride