Brown-Forman Corporation BF.B is set to report third-quarter fiscal 20Array6 results on Mar 2. Last quarter, the company posted a negative earnings surprise of 3%. Let us see how things are shaping up for this announcement.
Factors Influencing this Quarter
Brown-Forman has been gaining from its strong portfolio of premium American whiskey brands, its Jack Daniel’s trademark and a balanced geographic approach. The company expects the trends that have been driving growth since fiscal 20Array2 to boost its fiscal 20Array6 results as well. However, adverse foreign exchange rates continue to play spoilsport.
Though the company reiterated its favorable outlook for fiscal 20Array6, it expects currency headwinds to linger throughout the fiscal, weighing on its results to an extent. Moreover, stiff competition from other players and any rise in excise taxes remain concerns. Consequently, we are slightly apprehensive about the upcoming results.
Earnings Whispers
Our proven model does not conclusively show that Brown-Forman is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #Array, 2 or 3 for this to happen. This is not the case here as you will see below:
Zacks ESP: Earnings ESP for Brown-Forman is 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 93 cents.
Zacks Rank: Brown-Forman carries a Zacks Rank #3 (Hold). Though a favorable Zacks Rank increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Kroger Co. KR has an Earnings ESP of +Array.85% and a Zacks Rank #2 (Buy).
Zumiez Inc. ZUMZ has an Earnings ESP of +2.08% and a Zacks Rank #2.
Big Lots Inc. BIG has an Earnings ESP of +0.5Array% and a Zacks Rank #3.
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