We expect AMETEK Inc. (AME - Free Report) to beat expectations when it reports second-quarter 2017 results on Aug 2.
We note that AMETEK has an impressive record of positive earnings surprise in the trailing four quarters, with an average surprise of 2.56%. Moreover, the stock has outperformed the broader S&P 500 on a year-to-date basis. While the index gained 10.7%, the stock returned 27.3%.
Why a Likely Positive Surprise?
Our proven model shows that AMETEK is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: AMETEK’s Earnings ESP is +1.61%. This is because the Most Accurate estimate is pegged at 63 cents while the Zacks Consensus Estimate is stands lower at 62 cents. A favorable ESP serves as a meaningful and leading indicator of a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: AMETEK currently 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 estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of AMETEK’s Zacks Rank #3 and +1.61% ESP makes us reasonably optimistic of an earnings beat.
AMTEK, Inc. Price and EPS Surprise
What is Driving the Better-than-Expected Earnings?
Robust organic growth and input from recently completed acquisitions are expected to positively impact AMETEK’s top line in the to-be-reported quarter. Revenues are expected to be fueled further by the company’s increased sales and operational excellence initiatives.
This, in combination with a strong portfolio of differentiated businesses, is expected to help the company post better results. The company continues to reap the benefits from the execution of its four core growth strategies of operational excellence, global market expansion, investments in product development and strategic acquisitions.
For the second quarter, management expects revenues to be up in mid-single digits year over year on a percentage basis. Earnings are expected to be in the range of 60 cents to 62 cents per share. For 2017, management expects revenues to be up in mid-single digits from 2016. Earnings are expected to be in the range of $2.40 to $2.48 per share.
Other Stocks that Warrant Look
Here are some stocks that you may also want to consider as our model shows these have the right combination of elements to deliver a positive earnings surprise:
Symantec Corporation (SYMC - Free Report) , with an Earnings ESP of +16.67% and Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arrow Electronics, Inc. (ARW - Free Report) , with an Earnings ESP of +1.13% and a Zacks Rank #2.
The Priceline Group Inc. (PCLN - Free Report) , with an Earnings ESP of +2.31% and a Zacks Rank #3.
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