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Boston Beer (SAM) Q3 Earnings: Will the Stock Disappoint?

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Alcohol-beverage company, The Boston Beer Company, Inc. (SAM - Free Report) is slated to report third-quarter 2016 results on Oct 20. In the last quarter, the company delivered a positive earnings surprise of 4.6%. However, it has underperformed the Zacks Consensus Estimate by an average of nearly 6% over the trailing four quarters. Let’s see how things are shaping up for this announcement.

BOSTON BEER INC Price and EPS Surprise
 

BOSTON BEER INC Price and EPS Surprise | BOSTON BEER INC Quote

Factors Influencing This Quarter

Though Boston Beer’s earnings beat estimates in the previous quarter, both top and bottom lines declined year over year owing to lower shipments and depletion trends. This in turn could be attributable to the fact that Boston Beer has been facing a tough time due to troubles at its Samuel Adams brand, which has been up against severe competition in the craft beer market, and weakness in the cider class. Further, taking into account the first-half trends, the company lowered its earnings and depletions outlook for 2016, thus making us apprehensive of the upcoming results.

Earnings Whispers

Our proven model does not conclusively show that Boston Beer is likely to beat earnings 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. This is not the case here, as you will see below:

Zacks ESP: Boston Beer currently has an Earnings ESP of -1.94%. This is because the Most Accurate estimate of $2.53 stands below the Zacks Consensus Estimate of $2.58.

Zacks Rank: Boston Beer carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks that Warrant a Look

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:

Crown Castle International Corp. (CCI - Free Report) , scheduled to release earnings on Oct 20, 2016, currently has an Earnings ESP of +1.77% and a Zacks Rank #1 (Strong Buy).

Big 5 Sporting Goods Corp. (BGFV - Free Report) , expected to report earnings on Oct 25, 2016, currently has an Earnings ESP of +3.33% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Amazon.com, Inc. (AMZN - Free Report) , expected to release earnings on Oct 27, 2016, currently has an Earnings ESP of +6.98% and a Zacks Rank #1.

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