Leggett & Platt, Incorporated (LEG), leading engineered products’ manufacturer, is slated to report its third-quarter 2014 results on Oct 22. In the last quarter, the company had delivered a positive earnings surprise of 2.1%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
On the one hand, the company remains optimistic about its performance, given the strength of its various businesses like Automotive, Aerospace, Bedding, Home Furniture and Office Furniture. However, management expects softness at its Store Fixtures and Commercial Vehicle Products businesses, owing to which we remain cautious.
Earnings Whispers?
Our proven model does not conclusively show that Leggett & Platt is likely to beat earnings 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: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate both stand at 50 cents.
Zacks Rank: Leggett & Platt 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 a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements:
The Kroger Co. (KR) has an Earnings ESP of +3.28% and a Zacks Rank #2.
L Brands, Inc. (LB) has an Earnings ESP of +3.13% and a Zacks Rank #2.
Chipotle Mexican Grill, Inc. (CMG) has an Earnings ESP of +0.52% 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
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment