Is Brown-Forman (BF.B) Likely to Miss Earnings This Season? - Analyst Blog


Brown-Forman Corporation ( BF.B ), one of the leading producers and distributors of premium alcoholic beverages in the world, is slated to report its first-quarter fiscal 2015 results on Aug 27, 2014. In the last quarter, it posted a positive surprise of nearly 5.1%. Let's see how things are shaping up for this announcement.

Factors Influencing the Quarter

The U.S. economy has rebounded strongly in the second quarter of 2014 registering GDP growth of 4%, which has been accompanied by a steady recovery in the job market. Therefore, we consider the outlook of this alcoholic beverage company to be bright. However, we believe that first-quarter bottom-line results might get negatively impacted by the rise in grape prices owing to steep decline in production. California has been facing its worst drought in over a century which has severely damaged grape production. Furthermore, grape production was also negatively impacted by the chilly weather conditions in the beginning of 2014.

Earnings Whispers?

Our proven model does not conclusively show that Brown-Forman is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 to surpass earnings estimates. However, this is not the case here, as you will see below:

Zacks ESP: ESP (Expected Surprise Prediction) for Brown-Forman is 0.00%. This is because the Most Accurate estimate stands at 73 cents per share, which is in line with the Zacks Consensus Estimate.

Zacks Rank: Brown-Forman's Zacks Rank #3 (Hold) when combined with a 0.00% ESP makes surprise prediction difficult. We caution against stocks with a Zacks Ranks #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 other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat:

Zoe's Kitchen, Inc. ( ZOES ) has an Earnings ESP of +50.00% and a Zacks Rank #2 (Buy).

Abercrombie & Fitch Co. ( ANF ) has an Earnings ESP of +10.00% and a Zacks Rank #2.

Shoe Carnival Inc. 's ( SCVL ) Earnings ESP stands at +5.88% and it carries a Zacks Rank #2.

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BROWN FORMAN B (BF.B): Free Stock Analysis Report

ABERCROMBIE (ANF): Free Stock Analysis Report

SHOE CARNIVAL (SCVL): Free Stock Analysis Report

ZOES KITCHEN (ZOES): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: ANF , SCVL , ZOES

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