We expect the leading global car rental company
Avis Budget Group Inc.
) to beat expectations when it reports second-quarter 2014 results
after the market closes on Aug 4.
Why a Likely Positive Surprise?
Our proven model shows that Avis Budget may beat earnings because
it has the right combination of two key components.
Positive Zacks ESP:
Avis Budget currently has an
of +3.18%. This is because the Most Accurate estimate stands at 65
cents per share, while the Zacks Consensus Estimate is pegged at 63
Zacks Rank #1 (Strong Buy):
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 Avis Budget's Zacks Rank #1 and Earnings ESP of
+3.18% makes us confident of a positive earnings beat.
What's Driving Better-than-Expected Earnings?
We expect Avis Budget to utilize the positivity created following
its first-quarter 2014 results, which benefited from strong volume
growth and improved pricing for both leisure and commercial travels
in North America. Furthermore, the company is gaining from strong
contributions made by the recently acquired Zipcar and Payless Car
As a strategy, the company remains focused on growing its highly
profitable customer segments and channels through acquisitions,
which are now yielding results. Furthermore, we believe that the
company's prudent investment toward technological advancements will
lead to an increase in its customer base and profitability.
Additionally, the company's encouraging forecasts for 2014 outlook
indicate that its top and bottom lines are set for growth in the
remaining quarters of 2014. Thus, we await another robust quarterly
performance when the company comes up with its second quarter
results on Monday.
Avis Budget has topped the Zacks Consensus Estimate in three of the
trailing four quarters with an average positive surprise of 30.8%.
In the last concluded quarter, the company surpassed the Zacks
Consensus Estimate by 100%.
Other Stocks to Consider
Avis Budget is not the only firm looking up this earnings season.
The following companies are also likely to beat earnings in the
Archer Daniels Midland Co. (
) has an Earnings ESP of +5.26% and a Zacks Rank #2 (Buy).
Wal-Mart Stores Inc. (
) has an Earnings ESP of +2.48% and a Zacks Rank #3 (Hold).
Quicksilver Resources Inc. (
) has an Earnings ESP of +14.29% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
AVIS BUDGET GRP (CAR): Free Stock Analysis
WAL-MART STORES (WMT): Free Stock Analysis
ARCHER DANIELS (ADM): Free Stock Analysis
QUICKSILVER RES (KWK): Free Stock Analysis
To read this article on Zacks.com click here.