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Family Dollar Stores (NYSE:FDO), stock had a volatile 2013. In spite of a couple brief periods of concentrated selling, the discount retailer's stock still managed to gain 18% on the year. Most analysts believe that the bull market of 2013 will continue into the new year but with more modest gains. Family Dollar Stores will be one of the first companies to report quarterly results in 2014, they are expected to report their FQ1 earnings release before the market opens on Thursday, January 9th.

The information below is derived from data submitted to the Estimize platform by a set of Buy Side and Independent analyst contributors.image

The current Wall Street consensus expectation is for FDO to report 70c EPS and $2.503B revenue while the current Estimize consensus from 12 Buy Side and Independent contributing analysts is 72c EPS and $2.512B revenue.

Over the past 6 quarters the Estimize community was more accurate in forecasting Family Dollar's EPS and revenue 3 times each. By tapping into a wider range of contributors including hedge-fund analysts, asset managers, students, and non professional investors Estimize has built a data set that is up to 69.5% more accurate than Wall Street, but more importantly it does a better job of representing the market's actual expectations.

The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case we are seeing an average differential between the consensuses. image

Over the past four months the Wall Street consensus trend for EPS has dropped from 77c to 70c while Wall Street revenue expectations have also decreased from $2.612B to $2.503B. The Estimize EPS consensus has declined from 76c to 72c while the revenue consensus has increased from $2.551B to $2.512B at the end of quarter. image

The distribution of estimates published by analysts on Estimize range from 68c to 76c EPS and $2.450B to $2.532B in revenues. This quarter we're seeing a slightly larger distribution of estimates. The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A wider distribution signaling the potential for greater volatility post earnings, a smaller vice versa. image

The analyst with the highest estimate confidence rating this quarter is TheEmulator23 who projects 72c EPS and $2.523B in revenue. Estimate confidence ratings are calculated through algorithms developed by our deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case TheEmulator23, who is ranked 25th overall among 3400 contributing analysts, is making a bullish call expecting Family Dollar Stores to beat the Street on both profit and revenue.

This quarter the Estimize community is expecting Family Dollar Stores Co. to beat Wall Street on both the top and bottom line. Throughout the past 6 quarters FDO has met or exceeded the Wall Street profit consensus 3 times. The contributing analysts that make up the Estimize consensus are expecting FDO to beat Wall Street expectations again on Thursday.

Disclosure: No positions


Source: Here's How Hedge Fund Analysts Expect Family Dollar To Report