Penske Automotive Group, Inc.
) is set to report second-quarter 2014 results on Jul 30, 2014.
Last quarter, it posted an earnings surprise of +1.39%. Let's see
how things are shaping up for this announcement.
Our proven model does not conclusively show that Penske Automotive
is likely to beat earnings this quarter. That is because a stock
needs to have both a positive
and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the
case here as you will see below.
Earnings ESP, which represents the difference between the Most
Accurate estimate and the Zacks Consensus Estimate, stands at
0.00%. This is because both the Most Accurate estimate and the
Zacks Consensus Estimate are poised at 87 cents.
Penske Automotive's Zacks Rank #2 (Buy) increases the predictive
power of ESP. However, when combined with a 0.00% ESP, it
makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated
stocks) going into an earnings announcement, especially when the
company is seeing a negative estimate revisions momentum.
Factors to Consider this Quarter
Penske Automotive is poised to benefit from increasing dealerships,
rising new vehicle sales and a strong financial position. Recently,
the company completed the acquisition of BMW of Greenwich
dealership in Greenwich, CT, which is expected to boost the
company's annual revenues by $190 million. Moreover, Penske
Automotive is focused on enhancing shareholders value by increasing
dividend payouts. The board announced a 5.3% increase in dividends
to 20 cents per share.
However, Penske Automotive has an extensive merchandise inventory.
As of Mar 31, 2014, the company's inventory comprised 74.1% of
Other Stocks to Consider
Here are some other companies you may want to consider as our model
shows that they have the right combination of elements to post an
earnings beat this quarter:
Meritor, Inc. (
) has an earnings ESP of +26.67% and a Zacks Rank #2 (Buy). The
company will be reporting second-quarter earnings on Jul 31, 2014.
BorgWarner Inc. (
), with an earnings ESP of +1.15% and a Zacks Rank #2, will be
reporting second-quarter earnings on Jul 31, 2014.
American Axle & Manufacturing Holdings Inc. (
) has an earnings ESP of +8.45% and a Zacks Rank #2. The company
will release its second-quarter financial results on Aug 1, 2014.
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