Markets
TGT

Is United Natural Foods (UNFI) Set to Beat Earnings Estimates?

The potential decline of the grocery industry, thanks in part to Amazon AMZN and other e-commerce-based delivery services, has been heavily speculated about recently. Traditional grocery chains and big-box giants have, however, fought back.

Industry bellwethers Walmart WMT and Target TGT committed to improve their online sales and delivery capabilities. Grocery power Kroger (KR) also set out to revamp its business model to better compete going forward, including partnering with delivery service Instacart.

All of this is good news for wholesale sellers, with more competition being the name of the game for them. One such industry wholesaler, United Natural Foods UNFI , is just days away from reporting its second-quarter fiscal 2018 results, and investors will want to know how the company is expected to perform during these more modern grocery wars.

The natural and organic food distributor, which boats 90,000 SKUs, is expected see its quarterly sales climb by nearly 7% to reach $2.45 billion, according to our consensus estimate.

United Natural Foods is also projected to see its quarterly earnings hit $0.53 per share, which would mark 6% growth from the year-ago period. Still, investors need to consider a few more metrics to understand if the company is poised to top this estimate.

Luckily, Zacks Premium customers can utilize the Earnings ESP Screener in order to search for stocks that are expected to beat. Zacks Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst estimates.

This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.

A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.

United Natural Foodscurrently has an Earnings ESP of 5.33%, which means earnings estimates have been higher directly ahead of UNFI's Q2 results. When paired with the company's current Zacks Rank #2 (Buy) standing, investors should consider the stock as one that could be poised to top estimates.

Investors should also note that United Natural Foodshas topped or matched earnings estimates in seven of the last eight quarters.

United Natural Foods is set to report its Q2 fiscal 2018 earnings results after market close on Thursday, March 8.

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

Amazon.com, Inc. (AMZN): Free Stock Analysis Report

United Natural Foods, Inc. (UNFI): Free Stock Analysis Report

Wal-Mart Stores, Inc. (WMT): Free Stock Analysis Report

Target Corporation (TGT): 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

TGT UNFI WMT AMZN

Other Topics

Earnings

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More