Monro Muffler (MNRO) was already a Zacks #4 Rank (Sell) in late March when it was trading above $65. But the company’s disappointing earnings report and below-consensus guidance on May 21 only inspired analysts to lower EPS estimates even further.
Consensus EPS projections for the current fiscal year ending March 2016 were brought down 5.6% to $2.18. But next year was hit even bigger as the consensus dropped 8.3% from earnings of $2.77 to $2.54.
Below are the detailed EPS tables for your reference.
Investors have to wonder what the analysts see that would cause them to go beyond company guidance and knock down 2016 estimates so much. At first glance, we can imagine the lower sales trends may be driven by competition, higher-quality autos with a faster replacement cycle, and more do-it-yourself mechanics as we can see in the earnings trends of Autozone (AZO), Advance Auto Parts (AAP), and O’Reilly Automotive (ORLY).
While it may be worth your time to try and find the fundamental research from Wall Street investment banks that would explain these moves, when the Zacks Rank slips to the cellar, it’s usually a solid red flag to just step aside until the dust settles.
Kevin Cook is a Senior Stock Strategist for Zacks where he runs the Follow The Money portfolio.
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O REILLY AUTO (ORLY): Free Stock Analysis Report
MONRO MUFFLER (MNRO): Free Stock Analysis Report
AUTOZONE INC (AZO): Free Stock Analysis Report
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