) is set to report its fiscal third-quarter 2014 (ended May 31,
2014) results on Jun 25, before the opening bell. It had delivered
a positive earnings surprise of 1.94% in the preceding quarter.
Let's see how things are shaping up for this announcement.
What is Driving the Better-than-Expected Earnings?
Monsanto is witnessing a rise in revenues based on its organic
as well as inorganic growth. Given the increased sales of corn and
soybeans, the company is expected to prosper. It has also been
launching products so as to gain a significant market share. In
fiscal 2013, the company unveiled the Intacta technology, for
facilitating soybean growth over the coming years.
Further, Monsanto has been making successful attempts to reduce
costs over the past quarters. However, overseas operations of the
company expose it to foreign currency fluctuations, thereby
impacting its earnings.
Why a Likely Positive Surprise?
Our proven model conclusively shows that Monsanto will beat
earnings this quarter because it has the right combination of two
Positive Zacks ESP:
, which represents the difference between the Most Accurate
estimate of $1.60 and the Zacks Consensus Estimate of $1.55, stands
at +3.23%. This is very meaningful and a leading indicator of a
likely positive earnings surprise for shares.
Monsanto carries a Zacks Rank #3 (Hold). Note that stocks with
Zacks Ranks #1, 2 or 3 have a significantly higher chance of
This combination of Monsanto's Zacks Rank and Earnings ESP makes
us confident about a positive earnings beat.
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Monsanto is not the only firm looking up this earnings season.
Other stocks in the sector having the right combination of the two
key ingredients are:
), with an Earnings ESP of +5.56% and a Zacks Rank #2 (Buy).
The Andersons, Inc.
), with an Earnings ESP of +8.70% and a Zacks Rank #3.
Exxon Mobil Corporation
), with Earnings ESP of +0.53% and a Zacks Rank #3.
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MONSANTO CO-NEW (MON): Free Stock Analysis
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