We expect aerospace and defense equipment manufacturer
TransDigm Group Incorporated
) to beat expectations when it reports fourthquarter and fiscal
2013 results on Nov 14th.
Why a Likely Positive Surprise?
Our proven model shows that TransDigm 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 +50.0%. This is
very meaningful and a leading indicator of a likely positive
earnings surprise for shares.
Zacks Rank #2 (Buy):
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 TransDigm's Zacks Rank # 2 (Buy) and +50.0%
ESP makes us very confident in looking for a positive earnings
beat on Nov 14th.
What is Driving the Better Than Expected Earnings?
Strategic acquisitions, strong brand image, strong revenues
from proprietary products and an increased revenue outlook are
expected to lead to a positive earnings surprise in the upcoming
The positive trend is seen in the trailing three of the four
quarters, with average surprise of 13.5%, which was partially
offset by the 11.7% negative surprise in the last reported
quarter. This negative was because of the additional interest
burden related to $1.4 billion of new debt raised in July to pay
a $22 dividend will affect its bottom line. However, moving
forward, TransDigm expects to reap positive synergies from its
three recent acquisitions.
Other Stocks to Consider
TransDigm is not the only firm looking up this earnings
season. We also see likely earnings beats coming from these 3
DST Systems Inc
), Earnings ESP of +1.54% and Zacks Rank #1 (Strong Buy)
), Earnings ESP of +6.12% and Zacks Rank #1 (Strong Buy)
Quanta Services Inc.
), Earnings ESP of +2.50% and Zacks Rank #2 (Buy)
DST SYSTEMS (DST): Free Stock Analysis Report
QUANTA SERVICES (PWR): Free Stock Analysis
TRANSDIGM GROUP (TDG): Free Stock Analysis
XYLEM INC (XYL): Free Stock Analysis Report
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