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WestRock (WRK) to Post Q4 Earnings: What's in the Cards?
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WestRock Company (WRK - Free Report) is scheduled to report fourth-quarter fiscal 2016 results on Nov 7, before the opening bell. In the last quarter, the company had delivered a positive earnings surprise of 8%. Let’s see how things are shaping up prior to this quarter.
Earnings Whispers
Our proven model does not conclusively show that WestRock will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat consensus estimates. That is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -1.61%. This is because the Most Accurate estimate stands at 61 cents, while the Zacks Consensus Estimate is pegged higher at 62 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: WestRock has a Zacks Rank #2. Though a Zacks Rank #2 increases the predictive power of ESP, a negative ESP makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Surprise History
WestRock outpaced the Zacks Consensus Estimate in each of the trailing four quarters. The average positive surprise was 6.10%.
Formed by the merger of MeadWestvaco and Rock-Tenn, WestRock is realizing the strategic benefits of the merger. The company is poised to benefit from its productivity programs and ongoing capital investment to upgrade its capabilities. Further, the company will benefit from acquisitions and the Grupo Gondi joint venture that will help it grow in the Mexican packaging market.
Meanwhile, WestRock has completed the spin-off of its specialty chemicals business – Ingevity – as it was not in-line with the company’s core business. This will better position the company to focus on its operating priorities and strategies.
However, merger-related expenses, higher original container prices, price/mix pressure due to the industry oversupply in both containerboard and boxboard is likely to hamper results.
Stocks to Consider
Here are some stocks worth considering, as according to our model they have the right combination of elements to post an earnings beat this quarter.
Koppers Holdings Inc. (KOP - Free Report) has an Earnings ESP of +18.18% and a Zacks Rank #1.
Green Plains Inc. (GPRE - Free Report) has an Earnings ESP of +11.11% and a Zacks Rank #2.
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WestRock (WRK) to Post Q4 Earnings: What's in the Cards?
WestRock Company (WRK - Free Report) is scheduled to report fourth-quarter fiscal 2016 results on Nov 7, before the opening bell. In the last quarter, the company had delivered a positive earnings surprise of 8%. Let’s see how things are shaping up prior to this quarter.
Earnings Whispers
Our proven model does not conclusively show that WestRock will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat consensus estimates. That is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -1.61%. This is because the Most Accurate estimate stands at 61 cents, while the Zacks Consensus Estimate is pegged higher at 62 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: WestRock has a Zacks Rank #2. Though a Zacks Rank #2 increases the predictive power of ESP, a negative ESP makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Surprise History
WestRock outpaced the Zacks Consensus Estimate in each of the trailing four quarters. The average positive surprise was 6.10%.
WESTROCK CO Price and EPS Surprise
WESTROCK CO Price and EPS Surprise | WESTROCK CO Quote
Factors At Play
Formed by the merger of MeadWestvaco and Rock-Tenn, WestRock is realizing the strategic benefits of the merger. The company is poised to benefit from its productivity programs and ongoing capital investment to upgrade its capabilities. Further, the company will benefit from acquisitions and the Grupo Gondi joint venture that will help it grow in the Mexican packaging market.
Meanwhile, WestRock has completed the spin-off of its specialty chemicals business – Ingevity – as it was not in-line with the company’s core business. This will better position the company to focus on its operating priorities and strategies.
However, merger-related expenses, higher original container prices, price/mix pressure due to the industry oversupply in both containerboard and boxboard is likely to hamper results.
Stocks to Consider
Here are some stocks worth considering, as according to our model they have the right combination of elements to post an earnings beat this quarter.
Koppers Holdings Inc. (KOP - Free Report) has an Earnings ESP of +18.18% and a Zacks Rank #1.
Teck Resources Limited has an Earnings ESP of +12.82% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Green Plains Inc. (GPRE - Free Report) has an Earnings ESP of +11.11% and a Zacks Rank #2.
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>>