Markets
GPS

Is a Beat Likely for Advance Auto Parts' (AAP) Q2 Earnings?

Advance Auto Parts, Inc.AAP is set to report second-quarter 2018 results before the opening bell on Aug 14.

In the last-reported quarter, the company delivered a positive surprise of 6.1%. Per the earnings record, it beat estimates thrice and missed once in the trailing four quarters, with an average beat of 9.9%.

In the past three months, shares of Advance Auto Parts have outperformed the industry it belongs to. The stock has moved up 20.3% compared with growth of 14.5% recorded by the industry during the period.

Let's see, how things have shaped up for the upcoming announcement.

Advance Auto Parts, Inc. Price and EPS Surprise

Advance Auto Parts, Inc. Price and EPS Surprise | Advance Auto Parts, Inc. Quote

Is a Positive Surprise Likely?

Our proven model shows that Advance Auto Parts is likely to beat on earnings this quarter. That is because it has the right combination of the two key ingredients - a positive Earnings ESP and a Zacks Rank #3 (Hold) or better - for increasing the odds of an earnings beat.

Earnings ESP : Advance Auto Parts has an Earnings ESP of +2.22% as the Most Accurate Estimate is pegged at $1.89, higher than the Zacks Consensus Estimate of $1.84. A positive ESP indicates that an earnings surprise is likely. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank : Advance Auto Parts currently carries a Zacks Rank #2 (Buy). This, when combined with a positive ESP, makes us reasonably confident of an earnings beat.

Conversely, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

What's Driving Better-Than-Expected Earnings?

Advance Auto Parts is emphasizing on expanding its footprint by opening new stores, widening online presence and collaboration. In April, the company partnered with Uber Technologies to become an exclusive aftermarket auto parts supplier for the Uber Visa Debit Card program for driver partners. The company anticipates this partnership to drive DIY traffic of stores and websites.

Moreover, the company is undertaking various initiatives to bolster and streamline its supply chain to meet the evolving need of customers. Except for supply chain initiatives, it is also looking into store transformation and inventory positioning. Further, the company expects to complete the transition to demand-driven assortment by 2018 end. Advance Auto Parts anticipates this to aid customers.

Other Stocks to Consider

Here are a few other stocks worth considering, with the right combination of elements to outpace earnings estimates this time around:

The Gap, Inc.GPS has an Earnings ESP of +3.90% and is a #2 Ranked player. The company is expected to announce its upcoming earnings on Aug 23.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Science Applications International CorporationSAIC has an Earnings ESP of +1.70% and is a #1 Ranked player. The company is expected to announce its upcoming earnings on Sep 6.

Frontline Ltd.FRO has an Earnings ESP of +10.59% and is a Zacks #3 Ranked player. The company is expected to report upcoming earnings on Aug 29.

Wall Street's Next Amazon

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It's a once-in-a-generation opportunity to invest in pure genius.

Click for details >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Frontline Ltd. (FRO): Free Stock Analysis Report

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION (SAIC): Free Stock Analysis Report

Advance Auto Parts, Inc. (AAP): Free Stock Analysis Report

The Gap, Inc. (GPS): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

GPS FRO SAIC AAP

Other Topics

Earnings Stocks

Latest Markets Videos