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AutoNation (AN) Q4 Earnings: Disappointment in the Cards?
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AutoNation, Inc. (AN - Free Report) is expected to report fourth-quarter and full year 2016 results, before the market opens on Feb 3. In the last quarter, the company posted a negative earnings surprise of 2.63%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
AutoNation is positioned to benefit from its optimal brand and market mix as well as a disciplined cost structure. Rising average age of cars and trucks in the U.S., a robust consumer credit environment, and an increase in new product offerings from automotive manufacturers are building a strong sales environment.
In addition, the company is poised to benefit from the expansion of its business through acquisitions. In the first nine months of 2016, the company completed the acquisition of 18 stores, which are likely to generate incremental annual revenues of $1.1 billion. Moreover, the company is focused on increasing shareholder returns through buybacks.
However, AutoNation operates in a highly competitive industry. The company competes on the basis of location, service, price, selection, and online and mobile offerings. Also, its performance is dependent on automakers. Any fluctuation in supply can adversely affect the company’s results. Additionally, its deteriorating financial position poses a concern.
Earnings Whispers
Our proven model does not conclusively show that AutoNation 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 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: The Earnings ESP for AutoNation is -1.04% because the Most Accurate estimate is 95 cents and the Zacks Consensus Estimate stands at 96 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: AutoNation carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.
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.
Price Performance
In the last three months, AutoNation’s share price increased 22.5% while the Zacks-categorized Retail/Wholesale Auto/Truck industry saw a 25% increase. Weak net income and operating income in the third quarter, deteriorating financial position and the competitive industry are putting pressure on the share price.
Stocks to Consider
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 this quarter:
Delphi Automotive PLC has an Earnings ESP of +1.88% and a Zacks Rank #3. The company is expected to report fourth-quarter and full-year 2016 results on Feb 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Autoliv Inc. (ALV - Free Report) has an Earnings ESP of +1.63% and a Zacks Rank #3. The company’s fourth-quarter and full-year 2016 financial results are expected to release on Feb 2.
American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) has an Earnings ESP of +2.94% and a Zacks Rank #3. The company is expected to report fourth-quarter and full-year 2016 financial numbers on Feb 10.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
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AutoNation (AN) Q4 Earnings: Disappointment in the Cards?
AutoNation, Inc. (AN - Free Report) is expected to report fourth-quarter and full year 2016 results, before the market opens on Feb 3. In the last quarter, the company posted a negative earnings surprise of 2.63%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
AutoNation is positioned to benefit from its optimal brand and market mix as well as a disciplined cost structure. Rising average age of cars and trucks in the U.S., a robust consumer credit environment, and an increase in new product offerings from automotive manufacturers are building a strong sales environment.
In addition, the company is poised to benefit from the expansion of its business through acquisitions. In the first nine months of 2016, the company completed the acquisition of 18 stores, which are likely to generate incremental annual revenues of $1.1 billion. Moreover, the company is focused on increasing shareholder returns through buybacks.
However, AutoNation operates in a highly competitive industry. The company competes on the basis of location, service, price, selection, and online and mobile offerings. Also, its performance is dependent on automakers. Any fluctuation in supply can adversely affect the company’s results. Additionally, its deteriorating financial position poses a concern.
Earnings Whispers
Our proven model does not conclusively show that AutoNation 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 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: The Earnings ESP for AutoNation is -1.04% because the Most Accurate estimate is 95 cents and the Zacks Consensus Estimate stands at 96 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
AutoNation, Inc. Price and EPS Surprise
AutoNation, Inc. Price and EPS Surprise | AutoNation, Inc. Quote
Zacks Rank: AutoNation carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.
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.
Price Performance
In the last three months, AutoNation’s share price increased 22.5% while the Zacks-categorized Retail/Wholesale Auto/Truck industry saw a 25% increase. Weak net income and operating income in the third quarter, deteriorating financial position and the competitive industry are putting pressure on the share price.
Stocks to Consider
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 this quarter:
Delphi Automotive PLC has an Earnings ESP of +1.88% and a Zacks Rank #3. The company is expected to report fourth-quarter and full-year 2016 results on Feb 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Autoliv Inc. (ALV - Free Report) has an Earnings ESP of +1.63% and a Zacks Rank #3. The company’s fourth-quarter and full-year 2016 financial results are expected to release on Feb 2.
American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) has an Earnings ESP of +2.94% and a Zacks Rank #3. The company is expected to report fourth-quarter and full-year 2016 financial numbers on Feb 10.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>