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Dean Foods (DF) Q1 Earnings: Is the Stock Poised for a Beat?
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We expect dairy products company Dean Foods Company to beat expectations when it reports first-quarter 2017 results on May 9.
While Dean Foods delivered a negative earnings surprise in the last reported quarter, it has outperformed the Zacks Consensus Estimate by an average of 2.1% in the trailing four quarters. The Zacks Consensus Estimate for the first-quarter has been stable, and has witnessed an uptrend for 2017, over the last 30 days. However, the current Zacks Consensus Estimate of 17 cents per share for the first quarter reflects a year-over-year decline of 61.9%. Nonetheless, analysts polled by Zacks expect revenues of nearly $2 billion, up 4.5% from the year-ago quarter. So, let’s see how things are shaping up for this announcement.
Our proven model shows that Dean Foods may beat earnings because it has the right combination of the two key components.
Zacks ESP: Dean Foods currently has an Earnings ESP of +5.88%. This is because the Most Accurate estimate is 18 cents, while the Zacks Consensus Estimate is pegged a notch lower at 17 cents. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Dean Foods carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings. Conversely, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.
The combination of Dean Foods’ Zacks Rank #3 and a positive ESP make us reasonably confident of a positive earnings beat.
What's Driving the Better-than-Expected Earnings?
Dean Foods has outperformed the Zacks categorized Consumer Staples sector in the past one year. The company’s shares jumped 8.9% over the past year, compared with the sector’s 5.7% growth.
The company remains on schedule with its growth and productivity plans, and expects it to ramp up throughout 2017. Further, management remains committed toward taking strategic steps to optimize capital allocation and concentrate on core business activities. The company’s strategic measures are primarily focused on three controllable factors – price realization, cost productivity and volumes at margins – which will aid in delivering appropriate returns.
Apart from this, the company’s robust brand portfolio helps it enjoy a market leading position in the food and beverage industry. Also, its deals with Organic Valley and Friendly’s highlight its focus on the growth of its core dairy-related business, while it is also vouching for opportunities in juices, teas and other beverages. These factors make us positive about the company’s upcoming results.
While total volumes in the first quarter are expected to decline about 1% year over year, the company remains confident of its strategic and brand building initiatives for future growth. Consequently, management projected first-quarter 2017 adjusted earnings to range between 12–20 cents a share.
Other Stocks that Warrant a Look
Here are some other companies you may want to consider as our model shows that these also have the right combination of elements to post an earnings beat:
Lowe's Companies, Inc. (LOW - Free Report) , slated to release earnings on May 24, currently has an Earnings ESP of +2.83% and a Zacks Rank #3.
L Brands, Inc. , scheduled to release earnings on May 17, currently has an Earnings ESP of +4.17% and a Zacks Rank #3.
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Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Dean Foods (DF) Q1 Earnings: Is the Stock Poised for a Beat?
We expect dairy products company Dean Foods Company to beat expectations when it reports first-quarter 2017 results on May 9.
While Dean Foods delivered a negative earnings surprise in the last reported quarter, it has outperformed the Zacks Consensus Estimate by an average of 2.1% in the trailing four quarters. The Zacks Consensus Estimate for the first-quarter has been stable, and has witnessed an uptrend for 2017, over the last 30 days. However, the current Zacks Consensus Estimate of 17 cents per share for the first quarter reflects a year-over-year decline of 61.9%. Nonetheless, analysts polled by Zacks expect revenues of nearly $2 billion, up 4.5% from the year-ago quarter. So, let’s see how things are shaping up for this announcement.
Dean Foods Company Price and EPS Surprise
Dean Foods Company Price and EPS Surprise | Dean Foods Company Quote
Why a Likely Positive Surprise?
Our proven model shows that Dean Foods may beat earnings because it has the right combination of the two key components.
Zacks ESP: Dean Foods currently has an Earnings ESP of +5.88%. This is because the Most Accurate estimate is 18 cents, while the Zacks Consensus Estimate is pegged a notch lower at 17 cents. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Dean Foods carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings. Conversely, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.
The combination of Dean Foods’ Zacks Rank #3 and a positive ESP make us reasonably confident of a positive earnings beat.
What's Driving the Better-than-Expected Earnings?
Dean Foods has outperformed the Zacks categorized Consumer Staples sector in the past one year. The company’s shares jumped 8.9% over the past year, compared with the sector’s 5.7% growth.
The company remains on schedule with its growth and productivity plans, and expects it to ramp up throughout 2017. Further, management remains committed toward taking strategic steps to optimize capital allocation and concentrate on core business activities. The company’s strategic measures are primarily focused on three controllable factors – price realization, cost productivity and volumes at margins – which will aid in delivering appropriate returns.
Apart from this, the company’s robust brand portfolio helps it enjoy a market leading position in the food and beverage industry. Also, its deals with Organic Valley and Friendly’s highlight its focus on the growth of its core dairy-related business, while it is also vouching for opportunities in juices, teas and other beverages. These factors make us positive about the company’s upcoming results.
While total volumes in the first quarter are expected to decline about 1% year over year, the company remains confident of its strategic and brand building initiatives for future growth. Consequently, management projected first-quarter 2017 adjusted earnings to range between 12–20 cents a share.
Other Stocks that Warrant a Look
Here are some other companies you may want to consider as our model shows that these also have the right combination of elements to post an earnings beat:
Wal-Mart Stores, Inc. (WMT - Free Report) , scheduled to release earnings on May 18, currently has an Earnings ESP of +2.08% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Lowe's Companies, Inc. (LOW - Free Report) , slated to release earnings on May 24, currently has an Earnings ESP of +2.83% and a Zacks Rank #3.
L Brands, Inc. , scheduled to release earnings on May 17, currently has an Earnings ESP of +4.17% and a Zacks Rank #3.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>