We expect The Cooper Companies Inc. (COO - Free Report) to beat expectations when it reports second-quarter fiscal 2016 results on Jun 2.
Why a Likely Positive Surprise?
Our proven model shows that CooperCompanies is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: Cooper Companies’ Earnings ESP stands at +1.04%. This is because the company’s Most Accurate estimate is $1.94 while the Zacks Consensus Estimate is pegged at $1.92. A favorable ESP serves as a meaningful and leading indicator of a likely positive surprise.
Zacks Rank: Cooper Companies currently has a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of Cooper Companies’ Zacks Rank #2 and +1.04% ESP makes us reasonably confident of an earnings beat.
What is Driving the Better-than-Expected Earnings?
We note that Cooper Companies has posted a positive earnings surprise of 2.34% on an average over the last four quarters.
We believe strength at the CooperSurgical segment, driven by the expanding presence in the fertility segment, will drive top-line growth. The company’s focus on genetic testing will also continue to drive growth in our view.
Cooper Companies expects complementary IVF products that were acquired through the takeover of Research Instruments and a small fertility micro-needle company at the beginning of February will add almost $1 million to revenues every quarter, starting from the second quarter.
Further, despite strong promotional activity from Johnson & Johnson (JNJ - Free Report) for their new daily silicone hydrogel product, management expects normal growth from the Americas in the to-be-reported quarter. This will boost CooperVision’s top line. Results from the EMEA and Asia-Pacific regions are also expected to be strong.
Cooper Companies also expects gross margins to make a rebound in the second quarter, which contracted 80 basis points in the first quarter of fiscal 2016.
However, volatile foreign exchange is likely to hurt the company’s results in the quarter to-be-reported.
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Baxter International (BAX - Free Report) , earnings ESP of +2.56% and a Zacks Rank #1.
Pfizer (PFE - Free Report) , earnings ESP of +3.17% and a Zacks Rank #1.
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This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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We expect The Cooper Companies Inc. (COO - Free Report) to beat expectations when it reports second-quarter fiscal 2016 results on Jun 2.
Why a Likely Positive Surprise?
Our proven model shows that CooperCompanies is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: Cooper Companies’ Earnings ESP stands at +1.04%. This is because the company’s Most Accurate estimate is $1.94 while the Zacks Consensus Estimate is pegged at $1.92. A favorable ESP serves as a meaningful and leading indicator of a likely positive surprise.
Zacks Rank: Cooper Companies currently has a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of Cooper Companies’ Zacks Rank #2 and +1.04% ESP makes us reasonably confident of an earnings beat.
What is Driving the Better-than-Expected Earnings?
We note that Cooper Companies has posted a positive earnings surprise of 2.34% on an average over the last four quarters.
We believe strength at the CooperSurgical segment, driven by the expanding presence in the fertility segment, will drive top-line growth. The company’s focus on genetic testing will also continue to drive growth in our view.
Cooper Companies expects complementary IVF products that were acquired through the takeover of Research Instruments and a small fertility micro-needle company at the beginning of February will add almost $1 million to revenues every quarter, starting from the second quarter.
Further, despite strong promotional activity from Johnson & Johnson (JNJ - Free Report) for their new daily silicone hydrogel product, management expects normal growth from the Americas in the to-be-reported quarter. This will boost CooperVision’s top line. Results from the EMEA and Asia-Pacific regions are also expected to be strong.
Cooper Companies also expects gross margins to make a rebound in the second quarter, which contracted 80 basis points in the first quarter of fiscal 2016.
However, volatile foreign exchange is likely to hurt the company’s results in the quarter to-be-reported.
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Baxter International (BAX - Free Report) , earnings ESP of +2.56% and a Zacks Rank #1.
Pfizer (PFE - Free Report) , earnings ESP of +3.17% and a Zacks Rank #1.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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