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Is a Beat in the Cards for Ameren (AEE) in Q3 Earnings?

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Ameren Corporation AEE is scheduled to release third-quarter 2018 results before the opening bell on Oct 31. Last reported quarter, the utility company delivered a positive earnings surprise of 22.78%.

The company’s bottom line also beat the Zacks Consensus Estimate in three of the last four quarters, the average being 9.76%.

Let’s see how things are shaping up prior to this announcement.

Why a Likely Positive Surprise?

Our proven model shows that Ameren is likely to beat on earnings this to-be-reported quarter. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen and Ameren has the right mix of the two elements. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Ameren has an Earnings ESP of +8.65%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Ameren currently has a Zacks Rank #2, which increases the predictive power of ESP. Thus, the company’s top Zacks Rank combined with a solid ESP makes us significantly confident of an earnings beat this reporting cycle.

Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Ameren Corporation Price and EPS Surprise

Ameren Corporation Price and EPS Surprise | Ameren Corporation Quote

Factors at Play

The Zacks Consensus Estimate for third-quarter 2018 earnings is pegged at $1.28 per share, up by 3.2% from the year-ago reported quarter’s tally of $1.24.

The company’s systematic investments in growth projects, infrastructure upgrades, electric transmission and delivery infrastructure are improving service reliability and generating profits. It invested $2.1 billion in 2017 and plans to pump in more resources worth $2.2 billion for 2018.

Ameren expects third-quarter earnings to gain from an increased transmission and electric distribution infrastructure investment and the company anticipates the bottom line to grow on account of lower refueling and maintenance outage at Ameren Missouri. In addition, refinancing of debts at favorable terms should lower the company’s interest expenses, which in turn, is also likely to aid its earnings improvement.

Stocks That Warrant a Look

Here are a few operators from the same industry with the apt combination of elements to beat estimates this time around.

Public Service Enterprise Group Incorporated PEG is expected to release third-quarter results on Oct 30. It has an Earnings ESP of +1.90% and a Zacks Rank #3.

Dominion Energy Inc D is expected to release third-quarter results on Nov 1. It has an Earnings ESP of +2.22% and a Zacks Rank of 2.

Alliant Energy Corporation LNT is expected to release third-quarter results on Nov 6. It has an Earnings ESP of +1.19% and a Zacks Rank of 3.

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