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Here's Why Snap-On (SNA) is Poised for Earnings Beat in Q2

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Snap-on Inc. (SNA - Free Report) is scheduled to report second-quarter 2021 results on Jul 22. The global provider of professional tools, equipment and related solutions is expected to have witnessed revenue and earnings growth in the to-be-reported quarter.

The Zacks Consensus Estimate for the company’s second-quarter earnings is pegged at $3.18 per share, which suggests an increase of 66.5% from the year-ago quarter’s reported figure. However, the consensus mark has moved down 1.2% in the past 30 days. For second-quarter revenues, the consensus mark is pegged at $964.1 million, which indicates growth of 8.8% from the prior-year quarters’ reported figure.

In the last reported quarter, the company delivered an earnings surprise of 33.1%. It delivered an earnings surprise of 24.2%, on average, in the trailing four quarters.

SnapOn Incorporated Price and EPS Surprise

 

SnapOn Incorporated Price and EPS Surprise

SnapOn Incorporated price-eps-surprise | SnapOn Incorporated Quote

Key Factors to Note

Snap-On has been gaining from its Value Creation model, which focuses on enhancing the franchise network, improving relationships with repair shop owners and managers, and expanding critical industries in emerging markets. The company’s Rapid Continuous Improvement (RCI) process — designed to enhance organizational effectiveness, generate savings and minimize costs — has been aiding margins.

Management has been making efforts to boost customer services along with enhancing manufacturing and supply-chain capabilities through RCI initiatives and further investments. Gains from these endeavors are likely to get reflected in the company’s second-quarter results.

A solid performance in OEM dealerships, and strength in diagnostics and repair information products to independent repair shop owners and managers are anticipated to have contributed to the company’s top line in the quarter under review. Increased investments in product innovation and enhanced brand awareness across the world also bode well.

However, Snap-on has been witnessing unfavorable currency movements, which offset growth. The company has been witnessing direct costs, including direct labor, temporary factory closures, wages for quarantines associates, event cancellation fees as well as health and safety-related expenses, stemming from the coronavirus crisis, which are expected to have continued in the second quarter.

What the Zacks Model Unveils

Our proven model conclusively predicts an earnings beat for Snap-on this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Snap-on has a Zacks Rank #3 and an Earnings ESP of +1.89%.

Other Stocks Poised to Beat Earnings Estimates

Here are some more companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat.

Boyd Gaming Corporation (BYD - Free Report) has an Earnings ESP of +54.29% and it currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Under Armour, Inc. (UAA - Free Report) has an Earnings ESP of +48.15% and it flaunts a Zacks Rank #1 at present.

Crocs, Inc. (CROX - Free Report) currently has an Earnings ESP of +8.44% and a Zacks Rank #2.


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