Will Best Buy (BBY) Beat on Earnings? - Analyst Blog

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We expect Best Buy Co., Inc. ( BBY ) - the specialty retailer of consumer electronics- to beat expectations when it reports third-quarter fiscal 2014 results on Nov 19, 2013.

Why a Likely Positive Surprise?

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

Positive Zacks ESP: Best Buy currently has an Earnings ESP of +9.09%. This is because the Most Accurate estimate stands at 12 cents, while the Zacks Consensus Estimate is pegged at 11 cents.

Zacks Rank #1 (Strong Buy): Note that stocks with a Zacks Ranks of #1, #2 and #3 have a significantly higher chance 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 Best Buy's Zacks Rank #1 (Strong Buy) and +9.09% ESP makes us very confident regarding a positive earnings beat on Nov 19.

What is Driving the Better-than-Expected Earnings?     

Best Buy is undertaking a competitive pricing strategy and making investments in areas such as online, mobile, the multi-channel approach, optimum utilization of floor area and refurbishment of its website (bestbuy.com) functionality. Best Buy also initiated the "buy online - ship from store" endeavor. The company in the last four quarters has outperformed the Zacks Consensus Estimate by an average of 31.4%.

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:

Hanesbrands Inc. ( HBI ), Earnings ESP of +1.11% and a Zacks Rank #1 (Strong Buy).

The J. M. Smucker Company ( SJM ), Earnings ESP of +0.63% and a Zacks Rank #2 (Buy)

Nordstrom Inc. ( JWN ), Earnings ESP of +0.75% and a Zacks Rank #3 (Hold).

BEST BUY (BBY): Free Stock Analysis Report

HANESBRANDS INC (HBI): Free Stock Analysis Report

NORDSTROM INC (JWN): Free Stock Analysis Report

SMUCKER JM (SJM): Free Stock Analysis Report

To read this article on Zacks.com 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 Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Symbols: BBY , HBI , JWN , SJM

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