Pilgrim's Pride Corporation's (NASDAQ:PPC) Business And Shares Still Trailing The Market

Pilgrim's Pride Corporation's (NASDAQ:PPC) price-to-earnings (or "P/E") ratio of 11.9x might make it look like a buy right now compared to the market in the United States, where around half of the companies have P/E ratios above 18x and even P/E's above 32x are quite common. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's limited. Recent times have been advantageous for Pilgrim's Pride as its earnings have been rising faster than most other companies. It might be that many expect the strong earnings performance to degrade substantially, which has repressed the P/E. If not, then existing shareholders have reason to be quite optimistic about the future direction of the share price. Check out our latest analysis for Pilgrim's Pride NasdaqGS:PPC Price to Earnings Ratio vs Industry April 1st 2025 Keen to find out how analysts think Pilgrim's Pride's future stacks up against the industry? In that case, our free report is a great place to start. Is There Any Growth For Pilgrim's Pride? There's an inherent assumption that a company should underperform the market for P/E ratios like Pilgrim's Pride's to be considered reasonable. If we review the last year of earnings growth, the company posted a terrific increase of 244%. The latest three year period has also seen an excellent 3,501% overall rise in EPS, aided by its short-term performance. So we can start by confirming that the company has done a great job of growing earnings over that time. Shifting to the future, estimates from the six analysts covering the company suggest earnings growth is heading into negative territory, declining 7.9% each year over the next three years. That's not great when the rest of the market is expected to grow by 11% per annum. With this information, we are not surprised that Pilgrim's Pride is trading at a P/E lower than the market. However, shrinking earnings are unlikely to lead to a stable P/E over the longer term. Even just maintaining these prices could be difficult to achieve as the weak outlook is weighing down the shares. The Bottom Line On Pilgrim's Pride's P/E Generally, our preference is to limit the use of the price-to-earnings ratio to establishing what the market thinks about the overall health of a company. We've established that Pilgrim's Pride maintains its low P/E on the weakness of its forecast for sliding earnings, as expected. At this stage investors feel the potential for an improvement in earnings isn't great enough to justify a higher P/E ratio. It's hard to see the share price rising strongly in the near future under these circumstances. You should always think about risks. Case in point, we've spotted 1 warning sign for Pilgrim's Pride you should be aware of. It's important to make sure you look for a great company, not just the first idea you come across. So take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E). If you're looking to trade Pilgrim's Pride, open an account with the lowest-cost platform trusted by professionals, Interactive Brokers.With clients in over 200 countries and territories, and access to 160 markets, IBKR lets you trade stocks, options, futures, forex, bonds and funds from a single integrated account.Enjoy no hidden fees, no account minimums, and FX conversion rates as low as 0.03%, far better than what most brokers offer.Sponsored Content