Tyson Foods, Inc. (TSN - Free Report) is set to report third-quarter fiscal 2016 results on Aug 8. Last quarter, the company posted a positive earnings surprise of 11.46%.
The company reported beat estimates in two of the last four quarters with an average positive surprise of 5.02 %.
Let's see how things are shaping up for this announcement.
Factors at Play
Tyson Foods’ regular product innovations and strong momentum in most business lines have been driving sales for quite some time now.
Further, the general shift of health conscious consumers from red meat to low-calorie chicken and processed chicken products is increasing the demand for the company’s products, thereby driving sales in its chicken segment. Such factors should have a favorable impact on the fiscal third-quarter results.
In the second quarter fiscal 2016, Tyson Foods introduced Ball Park hotdogs, Jimmy Dean breakfast sausage and Hillshire Farm smoked sausage and lunch meat in the chicken category. This should contribute to top-line growth.
Further, integration of Hillshire Co. brands in the last fiscal is expected to boost profits in the quarter.
Our proven model does not conclusively show that Tyson Foods is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #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 Tyson Foods is 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at $1.07.
Zacks Rank: Tyson Foods has a Zacks Rank #3. Although the company has a favorable Zacks Rank, its 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Some stocks in the consumer staples sector that have both a positive Earnings ESP and a favorable Zacks Rank are:
Dean Foods Company. has an Earnings ESP of +2.63% and a Zacks Rank #3.
Inter Parfums Limited. (IPAR - Free Report) has an Earnings ESP of +5.26% and a Zacks Rank #1.
Post Holdings Limited. (POST - Free Report) has an Earnings ESP of +14.89% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download7 Best Stocks for the Next 30 Days. Click to get this free report >>