Fomento Económico Mexicano, S.A.B de C.V FMX, also known as FEMSA, is slated to report first-quarter 2015 results on Apr 30. Let’s see how things are shaping up for this announcement.
Factors Influencing This Quarter
FEMSA’s strong performance across most markets, enhanced pricing and packaging strategies are likely to be growth drivers for the company. Further, FEMSA seems to be benefitting from the integration of Fluminense and Spaipa in Brazil.
The company’s efforts to diversify its product portfolio along with the expansion of its convenience store chain also bode well. However, we remain apprehensive about the stock’s performance as increased financing expenses, resulting from the bonds issued, along with unfavorable foreign exchange rates can weigh on its margins. These factors can adversely impact its upcoming results.
Earnings Whispers
Our proven model does not conclusively show that FEMSA 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 for FEMSA is currently pegged at 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 48 cents.
Zacks Rank: FEMSA carries a Zacks Rank #3 (Hold). Though a Zacks Rank #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 to post an earnings beat this quarter:
American Eagle Outfitters Inc.’s AEO Earnings ESP stands at +18.18% and it carries a Zacks Rank #2 (Buy).
Best Buy Co. Inc. BBY with an Earnings ESP of +3.45% holds a Zacks Rank #3.
Bunge Ltd’s BG Earnings ESP stands at +0.88% and it carries a Zacks Rank #3.
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