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DineEquity (DIN): A Beat in the Cards this Earnings Season?
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We expect CA-based restaurant operator DineEquity, Inc. (DIN - Free Report) to beat expectations when it reports third-quarter fiscal 2016 numbers on Nov 1, before the opening bell.
Last quarter, DineEquity’s earnings were in line with the Zacks Consensus Estimate. Meanwhile, the trailing four-quarter average earnings surprise stands at a positive 3.35%.
Let’s see how things are shaping up for this announcement.
Our proven model shows that DineEquity is likely to beat earnings because it has the perfect combination of two key ingredients.
Zacks ESP: Earnings ESP for DineEquity is +2.16% because the Most Accurate estimate is pegged at $1.42 while the Zacks Consensus Estimate is at $1.39. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: DineEquity currently has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of DineEquity’s Zacks Rank #3 and +2.16% ESP makes us reasonably confident of an earnings beat.
What is Driving the Better-than-Expected Earnings?
Comps at the International House of Pancakes (IHOP) brand are expected to be positive, in line with what has been the trend for the past 13 consecutive quarters. The company’s menu innovation strategy and breakfast inspired food offered throughout the day should boost comps in the to-be-reported quarter.
However, DineEquity’s Applebee's Neighborhood Grill & Bar domestic system-wide comps weren’t encouraging in the first half of 2016. Nonetheless, steps taken to revitalize the brand via increased focus on food and menu innovation, guest satisfaction and marketing are expected to somewhat improve comps.
Meanwhile, though the company is looking to build a new prototype in order to reduce costs, an increase in general and administrative expenses and expenses related to sales initiatives may dent the quarter’s profits.
Stocks to Consider
Here are some restaurant companies to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Fogo de Chao, Inc. has an earnings ESP of +13.33% and a Zacks Rank #3.
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) has an earnings ESP of +7.69% and a Zacks Rank #3.
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DineEquity (DIN): A Beat in the Cards this Earnings Season?
We expect CA-based restaurant operator DineEquity, Inc. (DIN - Free Report) to beat expectations when it reports third-quarter fiscal 2016 numbers on Nov 1, before the opening bell.
Last quarter, DineEquity’s earnings were in line with the Zacks Consensus Estimate. Meanwhile, the trailing four-quarter average earnings surprise stands at a positive 3.35%.
Let’s see how things are shaping up for this announcement.
DINEEQUITY INC Price and EPS Surprise
DINEEQUITY INC Price and EPS Surprise | DINEEQUITY INC Quote
Why a Likely Positive Surprise?
Our proven model shows that DineEquity is likely to beat earnings because it has the perfect combination of two key ingredients.
Zacks ESP: Earnings ESP for DineEquity is +2.16% because the Most Accurate estimate is pegged at $1.42 while the Zacks Consensus Estimate is at $1.39. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: DineEquity currently has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of DineEquity’s Zacks Rank #3 and +2.16% ESP makes us reasonably confident of an earnings beat.
What is Driving the Better-than-Expected Earnings?
Comps at the International House of Pancakes (IHOP) brand are expected to be positive, in line with what has been the trend for the past 13 consecutive quarters. The company’s menu innovation strategy and breakfast inspired food offered throughout the day should boost comps in the to-be-reported quarter.
However, DineEquity’s Applebee's Neighborhood Grill & Bar domestic system-wide comps weren’t encouraging in the first half of 2016. Nonetheless, steps taken to revitalize the brand via increased focus on food and menu innovation, guest satisfaction and marketing are expected to somewhat improve comps.
Meanwhile, though the company is looking to build a new prototype in order to reduce costs, an increase in general and administrative expenses and expenses related to sales initiatives may dent the quarter’s profits.
Stocks to Consider
Here are some restaurant companies to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
The Wendy's Company (WEN - Free Report) has an earnings ESP of +10.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Fogo de Chao, Inc. has an earnings ESP of +13.33% and a Zacks Rank #3.
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) has an earnings ESP of +7.69% and a Zacks Rank #3.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>