Lowe's Companies Inc.
), the world's second largest home improvement retailer, is set
to report its first-quarter fiscal 2013 results on May 22. In the
last quarter it posted a positive surprise of 13%. Let's see how
things are shaping up for this announcement.
Growth Factors this Past Quarter
Improved merchandise and increased demand on account of
remodeling activities following Hurricane Sandy, led Lowe's to
post better-than-expected fourth-quarter fiscal 2012. Lowe's
boasts a proven strategy of investing in stores to enhance
customer-shopping experience by improving point-of-sale and
directional signage, and enhancing its array of products.
Our proven model does not conclusively show that Lowe's is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
)and a Zacks Rank of #1, #2 or #3 for this to happen. This is not
the case here as you will see below.
Negative Zacks ESP:
ESP for Lowe's is -1.96%. This is because the Most Accurate
Estimate stands at 50 cents, while the Zacks Consensus Estimate
is pegged at 51 cents.
Zacks Rank #3 (Hold):
Lowe's Zacks Rank #3 (Hold) lowers the predictive power of ESP
because the Zacks Rank #3 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 revisions 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:
Flowers Foods, Inc.
) with Earnings ESP of +9.38% and a Zacks Rank #1 (Strong
J&J Snack Foods Corp.
) with Earnings ESP of +0.90% and a Zacks Rank #2 (Buy).
ConAgra Foods, Inc.
) with Earnings ESP of +1.70% and a Zacks Rank #3 (Hold).
CONAGRA FOODS (CAG): Free Stock Analysis
FLOWERS FOODS (FLO): Free Stock Analysis
J&J SNACK FOODS (JJSF): Free Stock Analysis
LOWES COS (LOW): Free Stock Analysis Report
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