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Will Cost Cut Help Kraft Heinz (KHC) Beat in Q2 Earnings?

We expect The Kraft Heinz Company KHC to beat expectations when it reports second-quarter 2017 results after market close on Aug 3. Last quarter, this packaged food manufacturer delivered a negative earnings surprise of 1.18%. However, the company delivered a positive earnings surprise in three of the last four quarters, the average beat being 8.09%.

The chart below depicts the surprise history.

The Kraft Heinz Company Price and EPS Surprise

The Kraft Heinz Company Price and EPS Surprise | The Kraft Heinz Company Quote

Why a Likely Positive Surprise?

Per our proven model, Kraft Heinz has the right combination of the two key ingredients - a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) - to be able to beat estimates.

Zacks ESP: The Most Accurate estimate stands at 97 cents per share, while the Zacks Consensus Estimate is pegged at 96 cents resulting in an Earnings ESP of +1.04%. This is a meaningful indicator of a likely positive surprise. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Kraft Heinz carries a Zacks Rank #3.

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

Factors at Play

The company has been witnessing top-line...