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Is Molson Coors (TAP) Likely to Disappoint in Q4 Earnings?
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Molson Coors Brewing Co. (TAP - Free Report) is set to report fourth-quarter 2016 results before the opening bell on Feb 14. Last quarter, this beverage company posted a positive earnings surprise of 1.98%. It should be noted that the company has posted two positive and two negative earnings surprises in the last four quarters, resulting in an average positive surprise of 4.79%.
Let’s see how things are shaping up prior to the announcement.
Molson Coors Brewing Company Price, Consensus and EPS Surprise
We note that Molson Coors has been struggling with weak volumes in the major markets of Canada, the U.S. and Europe over the past several quarters. Estimates have also declined over the past 60 days. Despite a modest recovery in the macroeconomic scenario, the company witnessed a year-over-year decline in earnings and revenues throughout 2015, as well as in all the three quarters of 2016 due to lower volumes and unfavorable foreign currency movements.
Tough macroeconomic conditions and competitive pressure have also remained headwinds for Molson Coors. The company also remains apprehensive about the fourth quarter and expects weak volumes to hinder growth.
The company is therefore focusing on improved marketing strategies for beers and targeting the above-premium brands to boost its market share. The company’s recent acquisition of 58% stake in MillerCoors, cost savings efforts and marketing investments are encouraging.
Though Molson Coors’ shares have increased 13.6% in comparison to the Zacks categorized Beverages-Alcohol industry’s growth of 3.7% over the past one year, the industry is part of the bottom 37% of the Zacks Classified industries (168 out of the 265). Even the broader Consumer Staples sector is placed at the bottom 6% of the Zacks Classified sectors (15 out of 16). This means the sector’s underperformance might impact the shares of the company in the near term.
Earnings Whispers
Our proven model does not conclusively show that Molson Coors 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. That is not the case here as you will see below.
Zacks ESP: Earnings ESP for Molson Coors is -14.74% as the Most Accurate estimate of 81 cents is lower than the Zacks Consensus Estimate of 95 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Molson Coors holds a Zacks Rank #4 (Sell).We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some consumer staple companies, which are worth considering, as our model shows that they have the right combination of these two elements.
Pinnacle Foods, Inc. has an Earnings ESP of +1.27% and a Zacks Rank #2.
Sanderson Farms, Inc. has an Earnings ESP of +4.48% and a Zacks Rank #3.
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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Is Molson Coors (TAP) Likely to Disappoint in Q4 Earnings?
Molson Coors Brewing Co. (TAP - Free Report) is set to report fourth-quarter 2016 results before the opening bell on Feb 14. Last quarter, this beverage company posted a positive earnings surprise of 1.98%. It should be noted that the company has posted two positive and two negative earnings surprises in the last four quarters, resulting in an average positive surprise of 4.79%.
Let’s see how things are shaping up prior to the announcement.
Molson Coors Brewing Company Price, Consensus and EPS Surprise
Molson Coors Brewing Company Price, Consensus and EPS Surprise | Molson Coors Brewing Company Quote
Factors to Consider
We note that Molson Coors has been struggling with weak volumes in the major markets of Canada, the U.S. and Europe over the past several quarters. Estimates have also declined over the past 60 days. Despite a modest recovery in the macroeconomic scenario, the company witnessed a year-over-year decline in earnings and revenues throughout 2015, as well as in all the three quarters of 2016 due to lower volumes and unfavorable foreign currency movements.
Tough macroeconomic conditions and competitive pressure have also remained headwinds for Molson Coors. The company also remains apprehensive about the fourth quarter and expects weak volumes to hinder growth.
The company is therefore focusing on improved marketing strategies for beers and targeting the above-premium brands to boost its market share. The company’s recent acquisition of 58% stake in MillerCoors, cost savings efforts and marketing investments are encouraging.
Though Molson Coors’ shares have increased 13.6% in comparison to the Zacks categorized Beverages-Alcohol industry’s growth of 3.7% over the past one year, the industry is part of the bottom 37% of the Zacks Classified industries (168 out of the 265). Even the broader Consumer Staples sector is placed at the bottom 6% of the Zacks Classified sectors (15 out of 16). This means the sector’s underperformance might impact the shares of the company in the near term.
Earnings Whispers
Our proven model does not conclusively show that Molson Coors 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. That is not the case here as you will see below.
Zacks ESP: Earnings ESP for Molson Coors is -14.74% as the Most Accurate estimate of 81 cents is lower than the Zacks Consensus Estimate of 95 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Molson Coors holds a Zacks Rank #4 (Sell).We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some consumer staple companies, which are worth considering, as our model shows that they have the right combination of these two elements.
ConAgra Foods, Inc. (CAG - Free Report) has an Earnings ESP of +4.55% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Pinnacle Foods, Inc. has an Earnings ESP of +1.27% and a Zacks Rank #2.
Sanderson Farms, Inc. has an Earnings ESP of +4.48% and a Zacks Rank #3.
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 >>