) to beat expectations when it reports fiscal second quarter 2013
results on Feb 5.
Why a Likely Positive Surprise?
Our proven model shows that Cardinal Health is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP:
Earnings Expected Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), which represents the difference between the Most Accurate
Estimate and the Zacks Consensus Estimate, is at +1.2%. This is a
meaningful and leading indicator of a likely positive earnings
surprise for shares.
Zacks Rank #3 (Hold):
Note that stocks with Zacks Ranks of #1, 2 and 3 have a
significantly higher chance of beating earnings. The sell rated
stocks (#4 and 5) should never be considered going into an
The combination of Cardinal Health's Zacks Rank #3 (Hold) and
Earnings ESP of +1.2% makes us confident of a positive earnings
beat this coming announcement.
What is Driving the Better than Expected Earnings?
The company stands to gain from the gradual shift in mix from
bulk to the higher-margin non-bulk sector of the Pharmaceutical
segment. It is also riding the generic wave. Overall, Cardinal
benefits from a spate of tuck-in acquisitions and capital
deployment strategies. The positive trend is seen in the trailing
four-quarter average surprise of 4.3%.
Other Stocks to Consider
Cardinal Health is not the only stock looking up this earnings
season. We also see likely earnings beats coming from these three
) has earnings ESP of +3.6% and Zacks Rank #1 (Strong Buy).
) has earnings ESP of +2.6% and Zacks Rank #1 (Strong Buy).
Becton, Dickinson and Company
) has earnings ESP of +3.3% and Zacks Rank #2 (Buy).
BECTON DICKINSO (BDX): Free Stock Analysis
CARDINAL HEALTH (CAH): Free Stock Analysis
CYBERONICS INC (CYBX): Free Stock Analysis
RESMED INC (RMD): Free Stock Analysis Report
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