Back to top

Image: Bigstock

Can DENTSPLY (XRAY) Pull a Surprise this Earnings Season?

Read MoreHide Full Article

York, PA-based DENTSPLY Sirona Inc. (XRAY - Free Report) , a dental solutions company, is expected to report first-quarter 2017 results on May 5.

DENTSPLY Sirona’s track record has been quite impressive, with the company comfortably beating estimates in each of the trailing four quarters. In the last reported quarter, it delivered a positive earnings surprise of 3.08%, bringing the four-quarter average to 6.48%. Let’s see how things are shaping up prior to this quarter.

Factors at Play

DENTSPLY’s dental & healthcare consumables segment holds considerable promise. Notably, this segment provides a broad spectrum of products that include preventive, restorative, instruments, endodontic and laboratory dental products, as well as consumable medical device products.

Furthermore, DENTSPLY’s dental implants, CAD/CAM systems, imaging systems, treatment centers and orthodontic products in the technology segment are likely to drive sales in our view.

We are also upbeat about the gradual recovery in the U.S. market. Especially, the emerging markets provide significant opportunities for the company as these areas are vastly untapped with low dental products’ penetration.

On the flip side, integration will be a risk, at least for the near term. However, DENTSPLY's merger with SIRONA is expected to generate cost savings to the tune of $125 million by the third year of the completion of the transaction.

Moreover, unfavorable foreign exchange will continue to hurt DENTSPLY’s results in the immediate future. Additionally, higher capital expenditure on product development along with persistent decline in sales is expected to keep margins under pressure.
 

DENTSPLY SIRONA Inc. Price and EPS Surprise

 

DENTSPLY SIRONA Inc. Price and EPS Surprise | DENTSPLY SIRONA Inc. Quote

Earnings Whispers

Despite a streak of positive developments, our quantitative model doesn’t conclusively point to an earnings beat 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) for this to happen. That is not the case here as you will see below.

Zacks ESP: The Earnings ESP for DENTSPLY SIRONA is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 51 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: DENTSPLY SIRONA carries a Zacks Rank #2 which increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.

We caution against stocks with a Zacks Ranks #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revision.

Stocks to Consider

Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Best Buy Co. Inc. (BBY - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #3. On average, the stock delivered a positive surprise of almost 27.70% in the last four quarters.

Global Partners LP (GLP - Free Report) delivered a positive surprise of almost 96.55% in the trailing four quarters. It has an Earnings ESP of +233.33% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Raymond James Financial, Inc. (RJF - Free Report) has an Earnings ESP of +3.45% and a Zacks Rank #1. The stock delivered a positive surprise of almost 14.4% in the last four quarters.

Will You Make a Fortune on the Shift to Electric Cars?   

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>

Published in