The current U.S. equity universe is highly volatile due to a number of domestic and international concerns. With the onset of the Q3 earnings season, investors are keeping an eye on the performance of major companies.
While estimating the performance of industrial stocks, we believe that factors like election-induced broader market instability, a strong U.S. dollar, weak energy resource prices, lackluster export numbers of China and the Brexit referendum might act as spoilsport. However, the time isn’t ripe to draw any concrete conclusion, as the actual results might hold surprises.
Below we briefly discuss the broader sectors’ earnings trend so far in the Jul–Sep 2016 quarter.
Our latest Earnings Preview article (released on Oct 14, 2016) reveals that roughly 4.3% of the Industrial stocks in the S&P 500 Group have reported results for the July-September quarter, recording 16% increase in earnings and 7.9% increase in revenues on a year-over-year basis. We predict that earnings of all the industrial stocks in the S&P 500 Group to increase 3.4% year over year but revenues are expected to inch down 0.5% over the same time frame.
What Awaits these 2 Industrial Stocks?
UniFirst Corp. UNF is slated to report fourth-quarter fiscal 2016 results on Oct 19, before the opening bell. For the last four quarters, the company reported a positive average earnings surprise of 4.82%. However, our proven model does not conclusively show that the company is likely to beat on earnings in the to-be-reported quarter. Though the stock carries a favorable Zacks Rank #3 (Hold) its Earnings ESP (the difference between the Most Accurate estimate and the Zacks Consensus Estimate) is -5.69%. The Zacks Consensus Estimate for the stock is pegged at $1.23 per share for Q4 over the last 7 days. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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