J. C. Penney Company, Inc.JCP is scheduled to release third-quarter fiscal 2015 results on Nov 13. The big question facing investors is, whether this department stores retailer will be able to post a positive earnings surprise in the quarter to be reported. The company's past performance reveals that it outperformed the Zacks Consensus Estimate by 18% and 27.9% in the second and first quarters of fiscal 2015, respectively. Let's see how things are shaping up for this announcement.
Zacks Model Shows Unlikely Earnings Beat
Our proven model does not conclusively show that J. C. Penney is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. J. C. Penney has an Earnings ESP of -15.25% as the Most Accurate estimate stands at a loss of 68 cents, while the Zacks Consensus Estimate is pegged at a loss of 59 cents. J. C. Penney carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
Factors Influencing this Quarter
Analysts observe that stiff competition, a volatile consumer spending environment and a promotional retail backdrop remain J. C. Penney's biggest concerns in the quarter to be reported. However, management remains confident that its strategic endeavors, which include cost containment efforts, deeper penetration of private brands, focus on omni-channel capabilities and expansion of Sephora stores, will continue to fuel a turnaround.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Signet Jewelers Limited SIG has an Earnings ESP of +2.63% and a Zacks Rank #2 (Buy).
Campbell Soup Company CPB has an Earnings ESP of +2.63% and a Zacks Rank #3.
Chico's FAS Inc. CHS has an Earnings ESP of +5.00% and a Zacks Rank #3.
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 >>
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
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.