Will Express Scripts Miss Earnings Estimates this Season?
Express Scripts (ESRX) is set to report second quarter results on Jul 29, 2014.
Last quarter, Express Scripts reported a 1.98% negative surprise as it missed the Zacks Consensus Estimate by a couple of cents. The company has posted an average negative earnings surprise of 0.54% over the past four quarters.
Let’s see how things are shaping up for this announcement.
Factors at Play
Concurrent with the first quarter results, Express Scripts lowered its annual guidance for 2014 due to an expected decline in prescription volume. The volume shortfall is mainly due to the delay of several client implementations from mid-year 2014 to Jan 1, 2015. In addition, in-group attrition along with lower net new healthcare reform lives also led to the lowered guidance.
The decline in prescription volume will adversely impact results in the second quarter of 2014. We are also cautious on top-line growth given the uncertain economic environment.
Earnings Whispers?
Our proven model does not conclusively show that Express Scripts will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Express Scripts has a 0.00% ESP. This is because both the Most Accurate Estimate and Zacks Consensus Estimate currently stand at $1.22.
Zacks Rank #4: We caution against stocks with Zacks Ranks #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements:
Endo International (ENDP) has an earnings ESP of +1.11% and carries a Zacks Rank #2 (Buy). It is scheduled to report its second-quarter results on Jul 31.
Hospira Inc. (HSP) has an earnings ESP of +1.79% and carries a Zacks Rank #1. It is expected to report its second-quarter results on Jul 30.
Valeant Pharmaceuticals (VRX) has an earnings ESP of 0.52% and carries a Zacks Rank #3 (Hold). It is expected to report second quarter results on Jul 31.
Read the Full Research Report on HSP
Read the Full Research Report on ENDP
Read the Full Research Report on ESRX
Read the Full Research Report on VRX
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