Johnson & Johnson
) is scheduled to report its first quarter 2013 results on Apr
16, 2013 before the opening bell.
Last quarter, the company posted a 1.71% positive surprise.
Let's see how things are shaping up prior to the
Factors at Play for 1Q
Last quarter, Johnson & Johnson recorded growth on the
back of strong product sales despite the negative impact of
currency fluctuation. Even though we expect the company to
continue facing headwinds in the form of pricing pressure,
manufacturing issues and US healthcare reform, we believe Johnson
& Johnson's diversified business model, lack of cyclicality,
and strong financial position will continue to help the company
pave its way through difficult situations.
Our proven model does not conclusively show that Johnson &
Johnson is likely to beat earnings this quarter. That is because
a stock needs to have both a positive earnings Expected Surprise
Prediction (ESP) (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here as you will see below.
Negative Zacks ESP:
This is because the Most Accurate estimate stands at $1.39 while
the Zacks Consensus Estimate is higher at $1.41. That is a
difference of -1.42%.
Zacks Rank #3 (Hold):
Johnson & Johnson's Zacks Rank #3 lowers the predictive power
of ESP because the Zacks #3 Rank when combined with a negative
ESP makes surprise prediction difficult. We caution against
stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into
the earnings announcement, especially when the company is seeing
negative estimate revision momentum.
Other Stocks to Consider
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 this quarter:
Eli Lilly and Company
), Earnings ESP of 6.73% and Zacks Rank #3 (Hold)
Onyx Pharma Inc.
), Earnings ESP of 3.39% and Zacks Rank #3 (Hold)
), Earnings ESP of 2.08% and Zacks Rank #2 (Buy)
GILEAD SCIENCES (GILD): Free Stock Analysis
JOHNSON & JOHNS (JNJ): Free Stock Analysis
LILLY ELI & CO (LLY): Free Stock Analysis
ONYX PHARMA INC (ONXX): Free Stock Analysis
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