Johnson & Johnson (NYSE:JNJ) is expected to report fiscal first quarter earnings on Tuesday, April 16th. The whisper number is $1.37, three cents behind the analysts' estimate. Whispers range from a low of $1.25 to a high of $1.43. JNJ has a 56% positive surprise history (having topped the whisper in 25 of the 45 earnings reports for which we have data).
- Beat whisper: 25 qtrs
- Met whisper: 0 qtrs
- Missed whisper: 20 qtrs
Our primary focus is on post earnings price movement. Knowing how likely a stock's price will move following an earnings report can help you determine the best action to take (long or short). In other words, we look at what happens when the company beats or misses the whisper number expectation.
The table below indicates the average post earnings price movement within a one and thirty trading day timeframe:
The strongest price movement of +0.8% comes within twenty trading days when the company reports earnings that beat the whisper number, and -1.1% within five trading day when the company reports earnings that miss the whisper number. The average price reaction is "as expected" (but limited) through thirty trading days when the company reports earnings.
The table below indicates the most recent earnings reports and short-term price reaction:
In the comparable quarter last year, the company reported earnings four cents ahead of the whisper number. Following that report, the stock realized a 1.3% loss in five trading days. Last quarter the company reported earnings one cent ahead of the whisper number. Following that report the stock realized a 1.4% gain in five trading days. Overall historical data indicates the company to be (on average) a limited negative price reactor through five trading days, and an "as expected" price reactor through thirty trading days (beat the whisper see strength, miss and see weakness).
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Since 1998, WhisperNumber.com has been tracking and publishing "crowd sourced estimates" for earnings. We call these earnings expectations whisper numbers. Our whisper numbers are gained from individual investors and traders just like you that have registered with our site. While the whisper number itself is an important part of our analysis, a company's "price reaction" to beating or missing the whisper number expectation is the key. On average, companies that exceed the whisper are "rewarded," while companies that miss are "punished" following an earnings report.