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Is a Beat in Store for Snap-on (SNA) This Earnings Season?
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Snap-on Incorporated (SNA - Free Report) is scheduled to report fourth-quarter 2017 results before the opening bell on Feb 8.
Snap-on has an excellent earnings surprise history. The company has not missed estimates in over seven years. Last quarter, it delivered a positive surprise of 0.8%, reflecting an average beat of 1.9% for the trailing four quarters.
We expect Snap-on to beat on earnings in the to-be-reported quarter.
Why a Likely Positive Surprise?
Our proven model shows that Snap-on has the right combination of the two key ingredients. For a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. And this is precisely the case here as you will see below:
Zacks ESP: Snap-on has an Earnings ESP of +0.50% as the Most Accurate estimate of $2.67 is pegged higher than the Zacks Consensus Estimate of $2.66. A positive ESP indicates a likely earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Snap-on carries a Zacks Rank #3, which increases the predictive power of ESP. Further, combined with a positive ESP, chances of an earnings beat are always pegged higher.
Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into the earnings announcement, especially when the company is witnessing negative estimate revisions.
Reasons Driving Better-Than-Expected Results
Over the past few quarters, Snap-On has been witnessing encouraging prospects in most of its business lines that signal toward brighter prospects going forward. The company’s Repair Systems & Information business has been gaining traction, driven by a rising penetration in the emerging markets, apart from continued software and hardware upgrades as well as productivity enhancements. For instance, the third quarter saw some substantial achievements across the segment with improving position of repair shop owners and managers. We believe that Repair Systems & Information group’s business deals with independent repair shop owners and managers will likely emerge a major growth driver in the near term.
Segment wise, the company’s Commercial & Industrial Group has been enjoying strong momentum. It has been benefiting from increased sales to customers in critical industries and a strong European-based hand tools business. For instance, the segment’s contribution to revenues exceeded estimates 0.6% and grew 8.7% year over year to $315 million in third-quarter 2017 results. Additionally, the company’s recent buyout of Car-O-Liner has strengthened its Repair Systems & Information Group position, allowing it to fortify its footprint in the auto and heavy duty markets.
Moreover, one of the company’s key fortes includes its ability to innovate, having led to meaningful sales growth over the last nine decades. The company has been investing in new products and growing brand awareness across the world. Particularly, it has been working toward expanding its base “beyond the garage” and offering advanced exclusive solutions to professionals performing critical tasks. Going forward, we believe that selected investment opportunities along with the company’s broad product line, offer modest growth options.
Despite the above positives, a prevalent softness in the industrial markets has significantly impacted client spending, marring the company’s prospects. Also, the aerospace project is facing some weakness in the Middle East region, thereby adding to its woes further. Besides, a sluggish oil and gas market activity continues to affect the company’s revenues from the industrial market, which in turn is likely to thwart Snap-on’s top line in the quarter to be reported.
Other Stocks to Consider
Here are some other stocks worth considering from the same space as these too comprise the right combination of elements to beat estimates this time around:
Party City Holdco Inc. has an Earnings ESP of +9.02% and the company is a Zacks #1 Ranked player.
G-III Apparel Group, LTD. (GIII - Free Report) has an Earnings ESP of +14.29% and a Zacks Rank #2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
Is a Beat in Store for Snap-on (SNA) This Earnings Season?
Snap-on Incorporated (SNA - Free Report) is scheduled to report fourth-quarter 2017 results before the opening bell on Feb 8.
Snap-on has an excellent earnings surprise history. The company has not missed estimates in over seven years. Last quarter, it delivered a positive surprise of 0.8%, reflecting an average beat of 1.9% for the trailing four quarters.
We expect Snap-on to beat on earnings in the to-be-reported quarter.
Why a Likely Positive Surprise?
Our proven model shows that Snap-on has the right combination of the two key ingredients. For a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. And this is precisely the case here as you will see below:
Zacks ESP: Snap-on has an Earnings ESP of +0.50% as the Most Accurate estimate of $2.67 is pegged higher than the Zacks Consensus Estimate of $2.66. A positive ESP indicates a likely earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Snap-On Incorporated Price and EPS Surprise
Snap-On Incorporated Price and EPS Surprise | Snap-On Incorporated Quote
Zacks Rank: Snap-on carries a Zacks Rank #3, which increases the predictive power of ESP. Further, combined with a positive ESP, chances of an earnings beat are always pegged higher.
Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into the earnings announcement, especially when the company is witnessing negative estimate revisions.
Reasons Driving Better-Than-Expected Results
Over the past few quarters, Snap-On has been witnessing encouraging prospects in most of its business lines that signal toward brighter prospects going forward. The company’s Repair Systems & Information business has been gaining traction, driven by a rising penetration in the emerging markets, apart from continued software and hardware upgrades as well as productivity enhancements. For instance, the third quarter saw some substantial achievements across the segment with improving position of repair shop owners and managers. We believe that Repair Systems & Information group’s business deals with independent repair shop owners and managers will likely emerge a major growth driver in the near term.
Segment wise, the company’s Commercial & Industrial Group has been enjoying strong momentum. It has been benefiting from increased sales to customers in critical industries and a strong European-based hand tools business. For instance, the segment’s contribution to revenues exceeded estimates 0.6% and grew 8.7% year over year to $315 million in third-quarter 2017 results. Additionally, the company’s recent buyout of Car-O-Liner has strengthened its Repair Systems & Information Group position, allowing it to fortify its footprint in the auto and heavy duty markets.
Moreover, one of the company’s key fortes includes its ability to innovate, having led to meaningful sales growth over the last nine decades. The company has been investing in new products and growing brand awareness across the world. Particularly, it has been working toward expanding its base “beyond the garage” and offering advanced exclusive solutions to professionals performing critical tasks. Going forward, we believe that selected investment opportunities along with the company’s broad product line, offer modest growth options.
Despite the above positives, a prevalent softness in the industrial markets has significantly impacted client spending, marring the company’s prospects. Also, the aerospace project is facing some weakness in the Middle East region, thereby adding to its woes further. Besides, a sluggish oil and gas market activity continues to affect the company’s revenues from the industrial market, which in turn is likely to thwart Snap-on’s top line in the quarter to be reported.
Other Stocks to Consider
Here are some other stocks worth considering from the same space as these too comprise the right combination of elements to beat estimates this time around:
Churchill Downs, Incorporated (CHDN - Free Report) has an Earnings ESP of +29.03% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Party City Holdco Inc. has an Earnings ESP of +9.02% and the company is a Zacks #1 Ranked player.
G-III Apparel Group, LTD. (GIII - Free Report) has an Earnings ESP of +14.29% and a Zacks Rank #2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>