Earnings Preview: Avon Products - Analyst Blog
April 29 2013 - 10:00AM
Zacks
We expect Avon Products
Inc. (AVP), the world’s leading beauty company to beat
expectations when it reports first-quarter 2013 results on Apr
30.
Why a Likely Positive
Surprise?
Our proven model shows that Avon
Products may beat the earnings because it has the right combination
of two key components.
Positive Zacks
ESP: Avon Products currently has an Earnings ESP (Read:
Zacks Earnings ESP: A Better Method) of +14.29%. This is because
the Most Accurate Estimate stands at 16 cents, while the Zacks
Consensus Estimate is pegged at 14 cents.
Zacks #2 Rank
(Buy):Note that stocks with a Zacks Rank #1, #2 and #3
have a higher chance of beating the earnings. The Sell rated stocks
(#4 and 5) should never be considered going into an earnings
announcement.
The combination of Avon Products’
Zacks Rank #2 (Buy) and Earnings ESP of +14.29% makes us confident
of a positive earnings beat on Apr 30.
What is Driving the
Better-than-Expected Earnings?
Of late, Avon has been encountering
challenges on various fronts including declining top and bottom
lines and a highly-leveraged balance sheet. In Nov 2012, Avon
outlined some strategic measures focused on accelerating the
top-line growth, trimming down costs and improving working capital.
Management is in the process of easing business issues and
directing the company toward the growth trajectory, while reviving
its competitive position among peers. We believe that the company’s
strategies are paying off, which is evident from its fourth-quarter
2012 operating results. After reporting dismal results over the
past 6 quarters, Avon posted better-than-expected total revenue and
earnings for the fourth quarter.
Other Stocks to
Consider
Avon Products is not the only firm
looking up this earnings season. The following companies are also
likely to beat earnings estimates in the to-be-reported
quarter:
Church & Dwight Co.
Inc. (CHD) with Earnings ESP of +1.39% and a Zacks Rank #3
(Hold).
Dean Foods Company
(DF) with Earnings ESP of +3.85% and a Zacks Rank #3 (Hold).
Zumiez Inc. (ZUMZ)
Earnings ESP of +9.09% and a Zacks Rank #3 (Hold).
AVON PRODS INC (AVP): Free Stock Analysis Report
CHURCH & DWIGHT (CHD): Free Stock Analysis Report
DEAN FOODS CO (DF): Free Stock Analysis Report
ZUMIEZ INC (ZUMZ): Free Stock Analysis Report
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