We expect utility service provider
Xcel Energy Inc.
) to surpass our expectation when it reports first quarter 2013
results on May 2.
Why a Likely Positive Surprise?
Our proven model shows that Xcel Energy 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 +4.65%. This is
a meaningful and leading indicator of a likely positive earnings
surprise for shares.
Zacks #2 Rank (Buy):
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
The combination of Xcel Energy's Zacks Rank #2 (Buy) and
+4.65% ESP makes us confident of an earnings beat on May 2.
What is Driving the Better-than-Expected
Xcel Energy's high-end midstream projects, disciplined
cost-control initiatives and competitive power rate offerings are
expected to be the key factors triggering a positive earnings
Consistent earnings surprises in the last four quarters
resulted in an average beat of 5.79%. Given the positive dynamics
we expect the same trend to continue in the first quarter as
The operational start-up of the Bemidji-Grand Rapids
Transmission line under its CapX2020 program will continue to
support Xcel Energy's growth. Moreover, the company's aggressive
investments in renewable generation especially wind will bode
well for Xcel Energy given the favorable climate for renewables
in the U.S. currently. With prices below the national average
owing to its technological efficiency, the company is well
positioned to reap gains from the market.
Other Stocks to Consider
Xcel Energy is not the only firm looking up this earnings
season. We also see likely earnings beats coming from these three
Brookfield Infrastructures Partners L.P.
) has an earnings ESP of +1.19% and carries a Zacks Rank #1
) has an earnings ESP of +1.33% and carries a Zacks Rank #2
Pinnacle West Capital Corporation
) has an earnings ESP of +200.0% and carries a Zacks Rank #3
ALLETE INC (ALE): Free Stock Analysis Report
BROOKFIELD INFR (BIP): Free Stock Analysis
PINNACLE WEST (PNW): Free Stock Analysis
XCEL ENERGY INC (XEL): Free Stock Analysis
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