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Is a Beat in Store for ALLETE (ALE) This Earnings Season?

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We expect ALLETE, Inc. (ALE - Free Report) to beat expectations when it reports second-quarter 2017 results on Aug 2, before the market opens. Last quarter, the company’s earnings were in line with the Zacks Consensus Estimate.

Why a Likely Positive Surprise?

Our proven model shows that ALLETE is likely to beat estimates because it has the right combination of two key ingredients. That is because 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.

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate of 59 cents and the Zacks Consensus Estimate of 56 cents, is +5.36%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: ALLETE currently carries a Zacks Rank #2. The combination of ALLETE’s favorable Zacks Rank and positive ESP makes us confident of a beat this season.

Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Allete, Inc. Price and EPS Surprise

Allete, Inc. Price and EPS Surprise | Allete, Inc. Quote

 

Factors to Consider

ALLETE is expected to benefit from improving economic conditions in its service territories, resulting in customers creating fresh demand for utility services.

The company will also gain from the new rates from its regulated Minnesota Power service territories.  The company has been gaining from the higher taconite production in its service areas as President Trump continues to promote the use of U.S.-made steel.   

Other Stocks to Consider

ALLETE is not the only company in the industry looking up this earnings season. We can expect earnings beats from these companies as well.

NiSource, Inc (NI - Free Report) has an Earnings ESP of +10.00% and a Zacks Rank #2. It is slated to report second-quarter 2017 results on Aug 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pattern Energy Group Inc. (PEGI - Free Report) has an Earnings ESP of +23.08% and a Zacks Rank #2. It is slated to report second-quarter 2017 results on Aug 4.

The AES Corporation (AES - Free Report) has an Earnings ESP of +20.00% and a Zacks Rank #2. It is slated to report second-quarter 2017 results on Aug 8.

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