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What’s in the Cards for Brown-Forman’s (BF.B) Q2 Earnings?


Brown-Forman Corporation BF.B is slated to report second-quarter fiscal 2017 results on Dec 7. Last quarter, the company posted a negative earnings surprise of 2.7%. However, it has outperformed the Zacks Consensus Estimate by an average of 2.3% in the trailing four quarters. Let’s see how things are shaping up for this announcement.

BROWN FORMAN B Price and EPS Surprise

BROWN FORMAN B Price and EPS Surprise | BROWN FORMAN B Quote

Factors Influencing This Quarter

Brown-Forman has been battling currency headwinds for a while now, along with tough economic conditions in emerging markets and a soft travel retail network. These factors have been weighing on the company’s top-line performance. Apart from this, the effects of the sale of the Southern Comfort and Tuaca brand also dented Brown-Forman’s top line in the first quarter, thereby leading to a soft start to the fiscal. Further, management had earlier stated that it anticipates the aforementioned challenges, and an uncertain global economic and geopolitical environment to linger in fiscal 2017. This, in turn, poses threats to Brown Forman’s upcoming release, thus keeping us on the sidelines.

Earnings Whispers

Our proven model does not conclusively show that Brown-Forman is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:

Zacks ESP: Brown-Forman currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 50 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Brown-Forman currently carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

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:

Express Inc. EXPR, with an Earnings ESP of + 8.33% and a Zacks Rank #3 (Hold), is slated to release earnings on Dec 1. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Kroger Co. KR, with an Earnings ESP of +9.52% and a Zacks Rank #3, is scheduled to release earnings on Dec 1.

Pier 1 Imports, Inc. PIR is expected to report results on Dec 21 and currently has an Earnings ESP of +8.33%. The stock carries a Zacks Rank #3.

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