Is FEMSA (FMX) Positioned to Beat Q2 Earnings Estimates? - Analyst Blog
We expect Fomento Económico Mexicano, S.A.B de C.V. FMX, also known as FEMSA, to beat expectations when it reports second-quarter 2015 results, after the market closes, on Jul 23.
Why a Likely Positive Surprise?
Our proven model shows that FEMSA is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: FEMSA currently has an Earnings ESP of +1.45%. This is because the Most Accurate estimate of 70 cents stands above the Zacks Consensus Estimate of 69 cents.
Zacks Rank: FEMSA carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1, 2 or 3 have a significantly higher chance of beating earnings. Conversely, the Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
The combination of FEMSA’s Zacks Rank #3 and Earnings ESP of +1.45% make us confident of an earnings beat.
What is driving the Better-than-Expected Results?
FEMSA’s strong performance across most markets, enhanced pricing and packaging strategies are likely to prove growth drivers for the company. Further, FEMSA seems to be on track to lift its performance with strategic measures, which include increasing store count, diversifying business portfolio and focusing on core business activities.
Some of the company’s recent efforts to expand its business portfolio include the acquisition of Mexican drugstore operator, Farmacias Farmacón as well as a full-fledged entry into Mexico’s gasoline retail business. Moreover, the company’s strong cash flow generation capacity enables it to make incremental investments in business expansion.
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 to post an earnings beat this quarter:
Cal-Maine Foods Inc. CALM has an Earnings ESP of +5.17% and a Zacks Rank #1 (Strong Buy).
Skechers USA Inc. SKX has an Earnings ESP of +2.02% and a Zacks Rank #1.
Caterpillar Inc. CAT has an Earnings ESP of +6.40% and a Zacks Rank #1.
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FOMENTO ECO-ADR (FMX): Free Stock Analysis Report
CATERPILLAR INC (CAT): Free Stock Analysis Report
SKECHERS USA-A (SKX): Free Stock Analysis Report
CAL-MAINE FOODS (CALM): Free Stock Analysis Report
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