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Is Tractor Supply (TSCO) Likely to Beat on Q4 Earnings? - Analyst Blog

Zacks Equity Research
Updated

Tractor Supply Company (TSCO) is slated to report its fourth-quarter and full-year 2014 results on Jan 28, 2015, after the closing bell. In the last quarter, the company had delivered a positive earnings surprise of 7.8%. Let’s see how things are shaping up for this announcement.

Why a Likely Positive Surprise?

Tractor Supply has been delivering better-than-expected results, as is evident from its average positive surprise of 1.7% delivered over the past four quarters. The company has been benefiting from its constant focus on revamping through concentration on expansion and enhancement of store productivity. These measures boost its top line and, in turn, enhance profitability. Further, going forward, the company intends to remain committed to efficient inventory management, shipment timing and marketing strategies. We believe that these constant endeavors keep the company well positioned for its upcoming results.

Following this optimistic outlook, management now expects sales, comparable store sales and earnings per share for 2014 to come on the higher end of its previously stated guidance ranges of $5.62–$5.70 billion, 2.5%–4.0% and $2.54–$2.62, respectively.

Earnings Whispers

Our proven model shows that Tractor Supply is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen and Tractor Supply has the right combination of the two key components.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at +2.63%. This is because the Most Accurate estimate of 78 cents stands above the Zacks Consensus Estimate of 76 cents.

Zacks Rank: Tractor Supply 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, Sell-rated stocks (Rank #4 and 5) should never be considered going into an earnings announcement.

The combination of Tractor Supply’s Zacks Rank #3 and positive ESP makes us reasonably confident of an earnings beat.

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:

Bebe Stores, Inc. (BEBE) has an Earnings ESP of +50.00% and a Zacks Rank #1 (Strong Buy).

J. C. Penney Company, Inc. (JCP) has an Earnings ESP of +23.08% and a Zacks Rank #2 (Buy).

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


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TRACTOR SUPPLY (TSCO): Free Stock Analysis Report
 
PENNEY (JC) INC (JCP): Free Stock Analysis Report
 
ARCHER DANIELS (ADM): Free Stock Analysis Report
 
BEBE STORES INC (BEBE): Free Stock Analysis Report
 
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Zacks Investment Research