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Can Meredith (MDP) Keep Its Earnings Streak Alive in Q2? - Analyst Blog

Zacks Equity Research
Updated

Meredith Corporation (MDP), one of the leading media and marketing companies with interests in publishing, broadcasting, integrated marketing and interactive media, is slated to report its second-quarter fiscal 2015 results on Jan 28. In the last quarter, it posted a positive surprise of 3.2%. Let’s see how things are shaping up prior to this announcement.

Factors Affecting This Quarter

The print media continues to be on a decline. Shift of more readers to online has burdened Meredith’s magazine portfolio. Though the company is focusing on the expansion of its digital presence, the metamorphosis will take time, thereby putting pressure on the company’s revenues.

Some of the company’s notable acquisitions for digital expansion in the recent past include New York-based advertising company Selectable Media and rights of Martha Stewart Living and Martha Stewart Weddings magazines and the www.marthastewart.com and www.marthastewartweddings.com websites.

Earnings Whispers

Our proven model does not conclusively project Meredith as likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. This is not the case here, as you will see below.

Zacks ESP: ESP for Meredith is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 98 cents.

Zacks Rank: Meredith carries a Zacks Rank #3. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into an earnings announcement, especially when the company is witnessing negative estimate revisions.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows these to have the right combination of elements to post an earnings beat:  

Chipotle Mexican Grill, Inc. (CMG) has an Earnings ESP of +3.18% and a Zacks Rank #2.

Thomson Reuters Corporation (TRI) has an Earnings ESP of +2.08% and a Zacks Rank #3.

Archer-Daniels-Midland Company (ADM) has an Earnings ESP of +5.50% and a Zacks Rank #3.


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MEREDITH CORP (MDP): Free Stock Analysis Report
 
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THOMSON REUTERS (TRI): Free Stock Analysis Report
 
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