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The impartial expects BorgWarner (BWA) ought send a year-over-year decline at earnings at lower revenues when it reports results because the area ended December 2019. This widely-known consensus expectation is significant at assessing the company's earnings picture, besides during a powerful factor that masses affect its near-term stock charge is how the true results compare ought to these estimates.
The earnings report, which is expected ought be released at February 13, 2020, masses assist the stock affect higher if these key numbers are better than expectations. at the other hand, if they miss, the stock can affect lower.
While the sustainability of the immediate charge change and future earnings expectations will mainly depend at management's discussion of affair conditions at the earnings call, it's worth handicapping the probability of a certain EPS surprise.
Zacks Consensus Estimate
This AUTO PARTS supplier is expected ought mail quarterly earnings of $1.03 per division at its upcoming report, which represents a year-over-year change of -14.9%.
Revenues are expected ought be $2.49 billion, down 3.1% from the year-ago quarter.
Estimate Revisions Trend
The consensus EPS estimate because the area has been revised 4.29% lower at the persist 30 days ought the modern level. This is essentially a reflection of how the covering analysts dine collectively reassessed their initial estimates at this period.
Investors ought make at worry that an aggregate change can no often muse the order of estimate revisions by each of the covering analysts.
Price, Consensus and EPS Surprise
Earnings Whisper
Estimate revisions ahead of a company's earnings free advocate clues ought the affair conditions because the epoch whose results are coming out. Our proprietary amaze prediction xerox -- the Zacks earnings ESP (Expected amaze Prediction) -- has this insight at its core.
The Zacks earnings ESP compares the Most exact estimate ought the Zacks Consensus estimate because the quarter; the Most exact estimate is a more trend translation of the Zacks Consensus EPS estimate. The conception here is that analysts revising their estimates exact ago an earnings free dine the latest information, which could potentially be more exact than what they and others contributing ought the consensus had predicted earlier.
Thus, a certain or negative earnings ESP reading theoretically indicates the responsible deviation of the true earnings from the consensus estimate. However, the model's predictive force is significant because certain ESP readings only.
A certain earnings ESP is a strong predictor of an earnings beat, specially when combined with a Zacks degree #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our investigation shows that stocks with this blend produce a certain amaze about 70% of the time, and a firm Zacks degree really increases the predictive force of earnings ESP.
Please letter that a negative earnings ESP reading is no indicative of an earnings miss. Our investigation shows that it is difficult ought foretell an earnings strike with any degree of belief because stocks with negative earnings ESP readings and/or Zacks degree of 4 (Sell) or 5 (Strong Sell).
How dine the Numbers Shaped Up because BorgWarner?
For BorgWarner, the Most exact estimate is higher than the Zacks Consensus Estimate, suggesting that analysts dine recently grow bullish at the company's earnings prospects. This has resulted at an earnings ESP of +0.75%.
On the other hand, the stock currently carries a Zacks degree of #3.
So, this blend indicates that BorgWarner will most responsible strike the consensus EPS estimate.
Does earnings amaze History contain Any Clue?
Analysts repeatedly deem ought what extent a company has been able ought competition consensus estimates at the past calm calculating their estimates because its future earnings. So, it's worth taking a appear at the amaze history because gauging its affect at the upcoming number.
For the persist reported quarter, it was expected that BorgWarner used to mail earnings of $0.85 per division when it really produced earnings of $0.96, delivering a amaze of +12.94%.
Over the persist four quarters, the company has beaten consensus EPS estimates three times.
Bottom Line
An earnings strike or lose can no be the virgin base because a stock moving higher or lower. Many stocks disagree up losing foundation despite an earnings strike owing ought other factors that disappoint investors. Similarly, unforeseen catalysts assist a quantity of stocks obtain despite an earnings miss.
That said, betting at stocks that are expected ought strike earnings expectations does amplify the odds of success. This is why it's worth checking a company's earnings ESP and Zacks degree ahead of its quarterly release. create certain ought use our earnings ESP Filter ought expose the best stocks ought buy or sell ago they've reported.
BorgWarner appears a compelling earnings-beat candidate. However, investors ought wage attention ought other factors too because betting at this stock or staying away from it ahead of its earnings release.
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BorgWarner Inc. (BWA) : release Stock Analysis Report
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