We expect medical device maker
) to beat expectations when it reports second quarter 2013
results on Jul 23.
Why a Likely Positive Surprise?
Our proven model shows that Bard is likely to beat earnings
because it has the right combination of two key
Positive Zacks ESP
: Expected Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), which represents the difference between the Most Accurate
Estimate and the Zacks Consensus Estimate, is at +0.73%. This is
very meaningful and a leading indicator of a likely positive
earnings surprise for shares.
Zacks Rank #3 (Hold)
: CR Bard currently carries a 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 earnings
The combination of Bard's Zacks Rank # 3 (Hold) and ESP of
+0.73% makes us very confident in looking for a positive earnings
beat on Jul 23.
What is Driving the Better-Than-Expected
Recently, in an effort to streamline its business, the company
agreed to divest certain assets of its Electrophysiology (EP)
). Management believes that the divestment will help the company
to focus on other high-growth businesses, which in turn should
boost top line.
We are of the opinion that the divestment of the
underperforming EP division complements CR Bard's long-term
strategy to focus on its business in lucrative markets that will
deliver higher returns. The capital from the divested business
will help the company to invest in areas with increasing
opportunities. We believe that CR Bard's initiatives to expand in
emerging markets bode well going forward.
Moreover, Bard remains committed to deliver incremental
returns to investors through dividends and share repurchase
programs. The company recently hiked its dividend by 5% and
authorized a $500 million share repurchase program.
Despite being entangled in a number of lawsuits, we wait to
see how CR Bard utilizes the expected benefits from the Gore
Other Stocks to Consider
CR Bard is not the only firm looking up this earnings season.
We also see likely earnings beats coming from these 2 industry
Sarepta Therapeutics, Inc.
), Earnings ESP of +27.78% and Zacks Rank #1 (Strong Buy)
Edwards Lifesciences Corp.
), Earnings ESP of +1.32% and Zacks Rank #2 (Buy)
BARD C R INC (BCR): Free Stock Analysis
BOSTON SCIENTIF (BSX): Free Stock Analysis
EDWARDS LIFESCI (EW): Free Stock Analysis
SAREPTA THERAP (SRPT): Free Stock Analysis
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