Ferrellgas Partners LP FGP will release its fiscal second-quarter 2015 financial results before the market opens on Mar 11, 2015. In the prior quarter, the partnership reported a negative earnings surprise of 73.9%.
Why a Likely Positive Surprise?
Our proven model shows that Ferrellgas Partners is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at +1.82%. This is a meaningful and leading indicator of a likely positive earnings surprise for the shares.
Zacks #3 Rank (Hold) : Note that stocks with Zacks Ranks #1 (Strong Buy), #2 (Buy) and #3 (Hold) have a significantly higher chance of beating earnings estimates. The combination of Ferrellgas Partners’ Zacks Rank # 3 and +1.82% ESP makes us confident of an earnings beat this quarter.
We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
What is Driving the Better Than Expected Earnings?
Weather plays an important role in driving demand for propane. The cool temperatures during November last year will have a positive impact on Ferrellgas’ performance this quarter in spite of the milder weather in December.
The partnership also has an acquisition driven growth strategy. The addition of salt water disposal services in the Eagle Ford Shale is expected to benefit Ferrellgas Partners. The increase in drilling activities in the Eagle Ford has spurred demand for Ferrellgas’ desalination services.
Stocks to Consider
Here are some companies in the same space worth considering on the basis of our model, which shows that they have the right combination of elements to post an earnings beat this quarter.
Global Partners LP GLP has an earnings ESP of +75.0% and carries a Zacks Rank #2 (Buy).
PBF Energy Inc. PBF has an earnings ESP of +12.25% and carries a Zacks Rank #2.
Valero Energy Corporation VLO has an earnings ESP of +12.1% and carries 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