Will Canadian National Railway (CNI) Beat Earnings Estimates This Quarter? - Analyst Blog
19 Juli 2013 - 10:00PM
Zacks
Canadian National Railway
Company (CNI) – the largest rail network in Canada – is
set to release its second-quarter 2013 results before the opening
bell on Jul 22, 2013.
In the last quarter, the company delivered a 1.67% negative
earnings surprise. Let’s see how things are shaping up for this
announcement.
Factors to be Considered this Quarter
Despite the economic slowdown, we expect Canadian National Railway
to benefit from strong growth of favorable demand/supply dynamics.
The company has also planned investments for infrastructural
development along with dividend payouts and share buybacks.
However, weakness in some of the product lines along with estimated
high expenses indicate that the company will perform at par with
the broader market and keep us sidelined.
Earnings Whispers
Our proven model does not conclusively show that Canadian National
Railway is likely to beat the Zacks Consensus Estimate this
quarter. This is because a stock needs to have both a positive
Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A
Better Method) and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3
(Hold) for this to happen. Unfortunately, this is not the case here
as elaborated below.
Negative Zacks ESP: This is because the Most Accurate Estimate is
$1.57 while the Zacks Consensus Estimate is higher at $1.58. This
leads to an ESP of -0.63% for Canadian National Railway.
Zacks Rank #3 (Hold): Canadian National Railway’s Zacks Rank #3,
decreases the predictive power of ESP.
We caution investors against the stock going into the earnings
announcement, as a Zacks Earnings ESP of -0.63% combined with a
Zacks Rank # 3 lowers the possibility of an earnings surprise.
Other Stocks to Consider
Here are some other companies to consider as our model shows they
have the right combination of elements to post an earnings beat
this quarter.
Westinghouse Air Brake Technologies Corporation
(WAB) has an Earnings ESP of +2.74% and carries a Zacks Rank #2
(Buy).
Celadon Group Inc. (CGI) has an Earnings ESP of
+3.33% and carries a Zacks Rank #2 (Buy).
Expeditors International of Washington Inc. (EXPD)
has an Earnings ESP of +2.33% and carries a Zacks Rank #3
(Hold).
CELADON GROUP (CGI): Free Stock Analysis Report
CDN NATL RY CO (CNI): Free Stock Analysis Report
EXPEDITORS INTL (EXPD): Free Stock Analysis Report
WABTECH (WAB): Free Stock Analysis Report
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