Will Brown-Forman (BF.B) Miss Earnings? - Analyst Blog

Brown-Forman Corporation (BF.B), one of the leading producers and distributors of premium alcoholic beverages in the world, is slated to report its fourth-quarter and fiscal 2014 results on Jun 4, 2014. In the last quarter, it posted a positive surprise of 9.3%. Let's see how things are shaping up for this announcement.

Factors Influencing the Quarter

With expectations of modest GDP growth close to 3% and recovery in the U.S. job market, we consider the outlook of this alcoholic beverage company to be bright. However, we believe that fourth-quarter results may be negatively impacted by the rise in grape prices due to chilly weather conditions in the beginning of 2014, which has severely damaged grape production.

Earnings Whispers?

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

Zero Zacks ESP: ESP (Expected Surprise Prediction) for Brown-Forman is 0.00%. This is because the Most Accurate estimate stands at 59 cents per share, which is in line with the Zacks Consensus Estimate.

Zacks Rank #4 (Sell): Brown-Forman's Zacks Rank #4 when combined with a zero ESP makes surprise prediction difficult. We caution against stocks with a Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks that Warrant a Look

Here are some other companies you may want to consider as our model shows they have the right combination of elements:

The Cooper Companies Inc. COO has an Earnings ESP of +0.62% and a Zacks Rank #2 (Buy).

HD Supply Holdings, Inc.'s HDS Earnings ESP stands at +11.77% and it carries a Zacks Rank #3 (Hold).

Joy Global, Inc. JOY has an Earnings ESP of +4.29% and a Zacks Rank #3.

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BROWN FORMAN B (BF.B): Free Stock Analysis Report
 
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