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Will J. C. Penney (JCP) Beat Estimates in Q3 Earnings?

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J. C. Penney Company, Inc. is slated to report third-quarter fiscal 2016 results on Nov 11. In the previous quarter, the company reported narrower-than-expected loss. Notably, in the trailing four quarters, the company has surpassed the Zacks Consensus Estimate, with an average surprise of 45.7%. Let’s see how things are shaping up for this announcement.

Likely to Beat Estimates

Our proven model shows that J. C. Penney is likely to beat estimates this quarter. 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.

The Most Accurate estimate stands at a loss of 18 cents, while the Zacks Consensus Estimate is pegged at a wider loss of 20 cents. So the ensuing difference – the Earnings ESP – is of +10%. A positive ESP combined with the company’s Zacks Rank #3, makes us reasonably confident of a positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Factors Influencing this Quarter

J. C. Penney has taken up several strategic initiatives to drive mall traffic. The company, in order to improve customer shopping experience, has been focusing on remodeling, renovating and refurbishing its stores with special focus on enhancing high-margin center core department.

Further, J. C. Penney continues to work on improving its omni-channel reach. In the second quarter of fiscal 2016, the company’s digital sales improved on the back of expanded assortment and enhanced customer experience. Incidentally, the company also launched a new mobile app in the second quarter. To drive more traffic online, the company is providing convenient shipping and pickup options like pick up in store same day facility, ship to any J. C. Penney store and faster home delivery across its store network. The company has made investments to enhance supply chain efficiency.

Given these factors, management remains positive about boosting its sales and EBITDA in the remainder of fiscal 2016, thus instilling confidence among investors. Additionally, the company retained its comps guidance of 3–4% growth as it anticipates sequential improvement in the third and fourth quarters.

PENNEY (JC) INC Price, Consensus and EPS Surprise

PENNEY (JC) INC Price, Consensus and EPS Surprise | PENNEY (JC) INC Quote

Stocks Poised to Beat Earnings Estimates

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

Dick's Sporting Goods Inc. (DKS - Free Report) currently has an Earnings ESP of +2.38% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cott Corporation currently has an Earnings ESP of +16.67% and a Zacks Rank #3.

Nordstrom Inc. (JWN - Free Report) currently has an Earnings ESP of +1.89% and a Zacks Rank #3.

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