We expect drug distributor
Cardinal Health Inc.
) to beat expectations when it reports fiscal 2014-fourth quarter
results on Aug 4, before the opening bell.
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:
, which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is at 1.24%. This is
very meaningful and a 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 1.24%
ESP makes us very confident in looking for a positive earnings beat
on Aug 4.
What is Driving the Better than Expected Earnings?
Cardinal Health is one of the largest distributors of
pharmaceuticals and medical supplies. Large-cap, diversified
healthcare distributors such as Cardinal Health are relatively
insulated from macro-economic uncertainty and a weak economy. It
has a diversified product portfolio, which is a hedge against the
risk of sales shortfall in testing times.
For fiscal 2014, Cardinal Health reaffirmed its forecast for
adjusted earnings per share in the band of $3.75 to $3.85,
indicating a 0.5 to 3.2% over the prior fiscal year. The current
Zacks Consensus Estimate of $3.82 for the year lies within the
Other Stocks to Consider
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 this quarter:
Medtronic, Inc. (
), Earnings ESP of 1.09% and a Zacks Rank #2 (Buy).
Opko Health, Inc. (
), Earnings ESP of 11.11% and a Zacks Rank #3 (Hold).
Wright Medical Group Inc. (
), Earnings ESP of 2.22% and a Zacks Rank #2 (Buy).
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CARDINAL HEALTH (CAH): Free Stock Analysis
MEDTRONIC (MDT): Free Stock Analysis Report
WRIGHT MEDICAL (WMGI): Free Stock Analysis
OPKO HEALTH INC (OPK): Free Stock Analysis
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