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Will Q4 Earnings Hold a Surprise for Estee Lauder (EL) Stock?
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Estée Lauder Companies Inc. (EL - Free Report) is set to report fourth-quarter and fiscal 2016 results on Aug 19, before the opening bell. Last quarter, the company posted a positive surprise 21.67%. The company has surpassed the Zacks Consensus Estimate in all the previous four quarters with an average positive surprise of 17.52%.
Let’s see how things are shaping up for this announcement.
Estée Lauder has been posting better-than-expected earnings results over the past several quarters on the back of solid organic sales growth, product innovation and cost-saving measures. We expect these positives to have a favorable impact on the upcoming earnings as well.
However, currency headwinds may impact volume in the fiscal fourth quarter. This is primarily because a strengthening U.S. dollar has lowered the export volume for the cosmetics company over the past few quarters.
With a significant amount of revenues coming from international operations, Estée Lauder’s earnings remain highly vulnerable to negative currency translation.
Moreover, macroeconomic pressures have been hurting sales of Estée Lauder’s prestige beauty brands. Slow retail growth in China and soft sales in travel retail business are expected to hamper sales in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Estée Lauder is likely to beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to surpass earnings estimate. However, that is not the case here due to the following factors:
Zacks ESP: Earnings ESP for Estée Lauder is -5.00% as the Most Accurate estimate is pegged at 38 cents and the Zacks Consensus Estimate stands at 40 cents.
Zacks Rank:Estée Lauder has a Zacks Rank #3.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks that investors may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
General Mills Inc.. (GIS - Free Report) with an Earnings ESP of +1.30% and a Zacks Rank #1.
Sanderson Farms Inc.. with an Earnings ESP of +6.39% and a Zacks Rank #1.
The J. M Smucker Company (SJM - Free Report) with an Earnings ESP of +4.07% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download7 Best Stocks for the Next 30 Days.Click to get this free report >>
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Will Q4 Earnings Hold a Surprise for Estee Lauder (EL) Stock?
Estée Lauder Companies Inc. (EL - Free Report) is set to report fourth-quarter and fiscal 2016 results on Aug 19, before the opening bell. Last quarter, the company posted a positive surprise 21.67%. The company has surpassed the Zacks Consensus Estimate in all the previous four quarters with an average positive surprise of 17.52%.
Let’s see how things are shaping up for this announcement.
ESTEE LAUDER Price and EPS Surprise
ESTEE LAUDER Price and EPS Surprise | ESTEE LAUDER Quote
Factors to Consider
Estée Lauder has been posting better-than-expected earnings results over the past several quarters on the back of solid organic sales growth, product innovation and cost-saving measures. We expect these positives to have a favorable impact on the upcoming earnings as well.
However, currency headwinds may impact volume in the fiscal fourth quarter. This is primarily because a strengthening U.S. dollar has lowered the export volume for the cosmetics company over the past few quarters.
With a significant amount of revenues coming from international operations, Estée Lauder’s earnings remain highly vulnerable to negative currency translation.
Moreover, macroeconomic pressures have been hurting sales of Estée Lauder’s prestige beauty brands. Slow retail growth in China and soft sales in travel retail business are expected to hamper sales in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Estée Lauder is likely to beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to surpass earnings estimate. However, that is not the case here due to the following factors:
Zacks ESP: Earnings ESP for Estée Lauder is -5.00% as the Most Accurate estimate is pegged at 38 cents and the Zacks Consensus Estimate stands at 40 cents.
Zacks Rank:Estée Lauder has a Zacks Rank #3.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks that investors may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
General Mills Inc.. (GIS - Free Report) with an Earnings ESP of +1.30% and a Zacks Rank #1.
Sanderson Farms Inc.. with an Earnings ESP of +6.39% and a Zacks Rank #1.
The J. M Smucker Company (SJM - Free Report) with an Earnings ESP of +4.07% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download7 Best Stocks for the Next 30 Days. Click to get this free report >>