We expect Church & Dwight Co. Inc. CHD to beat estimates when it reports first-quarter 2015 results on May 7. In the last quarter, it had posted a negative surprise of 2.5%. Let’s see how things are shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model shows that Church & Dwight is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Church & Dwight has the right combination of the two key components.
Zacks ESP: Church & Dwight currently has an Earnings ESP of +1.28%. This is because the Most Accurate estimate stands at 79 cents, while the Zacks Consensus Estimate is pegged at 78 cents.
Zacks Rank: Church & Dwight carries a Zacks Rank #3 (Hold). Conversely, the Sell-rated stocks (Rank #4 and 5) should never be considered going into an earnings announcement.
Church & Dwight’s Zacks Rank #3 and positive ESP of make us reasonably confident of an earnings beat.
What's Driving Better-than-Expected Earnings?
Church & Dwight has been riding on continuous expansion of its product portfolio and cost containment efforts. Further, the company launched a number of products in 2014 which received favorable responses from consumers. These factors have been boosting the company’s bottom and top lines amid intense competition and are likely to do so going forward.
Despite currency headwinds and stiff competition, the company expects to gain from the improving macro trends in the U.S. economy, like falling fuel prices and the rebounding labor market.
Stocks to Consider
Here are some other companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat:
Jack in the Box Inc. JACK has an Earnings ESP of +1.52% and a Zacks Rank #3.
Kate Spade & Company KATE has an Earnings ESP of +150.0% and a Zacks Rank #3.
Treehouse Foods, Inc. THS has an Earnings ESP of +1.72% and a Zacks Rank #3.
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