We expect the world's largest corn processor
Archer Daniels Midland Co.
) to beat expectations when it reports second-quarter 2014 results
on Aug 5.
Why a Likely Positive Surprise?
Our proven model shows that Archer Daniels may beat earnings
because it has the right combination of two key components.
Positive Zacks ESP:
Archer Daniels currently has an
of +2.67%. This is because the Most Accurate estimate stands at 77
cents per share, while the Zacks Consensus Estimate is pegged at 75
Zacks Rank #3 (Hold):
Note that stocks with a Zacks Rank #1, 2 and 3 have a higher chance
of beating earnings. The Sell-rated stocks (#4 and 5) should never
be considered going into an earnings announcement.
The combination of Archer Daniels' Zacks Rank #3 and Earnings ESP
of +2.67% makes us confident of a positive earnings beat.
What is Driving Better-than-Expected Earnings?
Archer Daniels is a leading player in the global food processing
industry. It has a network of over 600 processing and sourcing
facilities and 27,000 vehicles operating across the Americas,
Europe and Asia for transportation of agricultural commodities.
This strengthens its well-established position in the market.
We believe that Archer Daniels' consistent focus on enhancing its
processing capabilities and global footprint through strategic
acquisitions and joint ventures bode well for future growth.
Furthermore, Archer Daniels' margins are expected to improve in
2014 as a result of robust global farm production, which will
subsequently lower the prices of agricultural products.
Other Stocks to Consider
Archer Daniels is not the only firm looking up this earnings
season. The following companies are also likely to beat earnings in
the to-be-reported quarter:
First Solar Inc. (
) has an Earnings ESP of +6.06% and a Zacks Rank #1 (Strong Buy).
Wal-Mart Stores Inc. (
) has an Earnings ESP of +2.48% and a Zacks Rank #3.
Quicksilver Resources Inc. (
) has an Earnings ESP of +14.29% and a Zacks Rank #3.
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ARCHER DANIELS (ADM): Free Stock Analysis
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