Will Kansas City Southern (KSU) Beat Earnings in Q4? - Analyst Blog
Kansas City Southern (KSU) is scheduled to report its fourth-quarter 2014 financial numbers before the opening bell on Jan 23.
Why a Likely Positive Surprise?
Our proven model shows that Kansas City Southern is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +1.63%. This is because the Most Accurate estimate stands at $1.25, whereas the Zacks Consensus Estimate is pegged lower at $1.23. This serves as a meaningful and leading indicator of a likely positive earnings surprise.
Zacks Rank: Kansas City Southern currently has a Zacks Rank #3 (Hold). Note that stocks with Zacks Rank #1, #2 or #3 have a significantly higher chance of beating earnings. Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.
The combination of Kansas City Southern’s Zacks Rank #3 and +1.63% ESP makes us reasonably confident of an earnings beat this season.
What is Driving the Better-Than-Expected Earnings?
Kansas City Southern operates across the Gulf of Mexico and is thus expected to gain from the region’s developing automotive market, which is largely benefiting from the low cost of production in the area. The company also expects its intermodal business to register high double-digit growth riding on increased cross border traffic.
Other Stocks to Consider
Here are other companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:
Delta Air Lines Inc. (DAL) with an earnings ESP of +2.67% and a Zacks Rank #1 (Strong Buy).
Union Pacific Corporation (UNP) with an earnings ESP of +0.66% and a Zacks Rank #3.
Alaska Air Group, Inc. (ALK) with an earnings ESP of +3.41% and a Zacks Rank #2 (Buy).
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KANSAS CITY SOU (KSU): Free Stock Analysis Report
UNION PAC CORP (UNP): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Free Stock Analysis Report
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