Is McGraw Hill (MHFI) Poised to Beat Earnings Estimates? - Analyst Blog


We expect McGraw Hill Financials, Inc. ( MHFI ), a financial information provider, to beat expectations when it reports third-quarter 2013 results on Oct 22, 2013.

Why a Likely Positive Surprise?

Our proven model shows that McGraw Hill is likely to beat earnings because it has the right combination of two key components.  

Positive Zacks ESP: McGraw Hill currently has an Earnings ESP of +1.28%. This is because the Most Accurate Estimate stands at 79 cents, while the Zacks Consensus Estimate is pegged at 78 cents.

Zacks Rank #2 (Buy): Note that stocks with a Zacks Ranks of #1, 2 and 3 have higher chances of beating earnings estimates. The Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.

The combination of McGraw Hill's Zacks Rank #2 (Buy) and +1.28% ESP makes us very confident regarding a positive earnings beat on Oct 22.

What is Driving the Better-than-Expected Earnings?     

McGraw Hill's strategic investment programs, effective capital allocation, impressive Q2 results on the back of strong performance by S&P Ratings and S&P Dow Jones Indices business and its share repurchases make us confident on the stock outperformance in the third quarter. The positive trend is seen in the trailing four-quarter average surprise of 9.0%.

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:

SouFun Holdings Ltd. ( SFUN ), Earnings ESP of +1.16% and a Zacks Rank #1 (Strong Buy).

Exponent, Inc. ( EXPO ), Earnings ESP of +1.79% and a Zacks Rank #1 (Strong Buy).

Verisk Analytics, Inc. ( VRSK ), Earnings ESP of +5.00% and a Zacks Rank #3 (Hold).

EXPONENT INC (EXPO): Free Stock Analysis Report

MCGRAW HILL FIN (MHFI): Free Stock Analysis Report

SOUFUN HLDG-ADR (SFUN): Free Stock Analysis Report

VERISK ANALYTIC (VRSK): Free Stock Analysis Report

To read this article on click here.

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: EXPO , MHFI , SFUN , VRSK

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