The Kroger Co. (KR), one of the largest grocery retailers, is slated to report third-quarter fiscal 2014 results on Dec 4. In the last quarter, it posted a positive surprise of 1.5%. Let’s see how things are shaping up for this announcement.
Factors Influencing This Quarter
A dominant position among the nation’s largest grocery retailers enables Kroger to expand its store base and boost market share by introducing new items. The company’s strong corporate and national brands helped in gaining customers’ loyalty. However, the intensifying price war among grocery stores to lure budget-constrained consumers may adversely impact Kroger’s sales and margins.
Earnings Whispers?
Our proven model does not conclusively show that Kroger is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below.
Zacks ESP: Kroger has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 61 cents.
Zacks Rank: Kroger carries a Zacks Rank #2 (Buy). Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are some other companies you may want to consider as our model shows that these have the right combination of elements:
Nike, Inc. (NKE) has an Earnings ESP of +1.45% and a Zacks Rank #2.
Casey's General Stores, Inc. (CASY) has an Earnings ESP of +6.25% and a Zacks Rank #2.
Carnival Corporation (CCL) has an Earnings ESP of +21.05% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment