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Summary

  • This quarter Wall Street expects Campbell Soup's earnings to come in 3 cents shy of FQ3 of last year while year over year revenue shrinks by 4%.
  • The current Wall Street consensus expectation is for Campbell Soup to report 59c EPS and $2.010B revenue while the current Estimize.com consensus from 9 Buy Side and Independent contributing analysts is 61c EPS and $2.016B in revenue.
  • On Monday contributing analysts on the Estimize.com platform expect Campbell's to report marginally ahead of revenue estimates while beating the Street's earnings consensus by 2 cents per share.

Campbell Soup Co. (NYSE:CPB) is set to report FQ3 2014 earnings before the market opens on Monday, May 19th. Campbell Soup is a producer of soups, snacks, and sauces. This quarter Wall Street expects Campbell Soup's earnings to come in 3 cents shy of FQ3 of last year while year over year revenue shrinks by 4%. Last quarter the soup maker reported a revenue dip of 2% while profits beat expectations growing 6 cents per share. Here's what investors are looking for from Campbell Soup Monday morning.

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

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(Click Here to see Estimates and Interactive Features for Campbell Soup)

The current Wall Street consensus expectation is for Campbell Soup to report 59c EPS and $2.010B revenue while the current Estimize.com consensus from 9 Buy Side and Independent contributing analysts is 61c EPS and $2.016B in revenue. This quarter the buy-side as represented by the Estimize.com community is expecting Campbell Soup to report in-line with Wall Street's revenue expectations while beating the profit consensus by a couple of cents per share.

Over the previous 6 quarters the consensus from Estimize.com has been more accurate than Wall Street in forecasting Campbell Soup's EPS and revenue 5 and 3 times respectively. By tapping into a wider range of contributors including hedge-fund analysts, asset managers, independent research shops, students, and non professional investors Estimize has created a data set that is more accurate than Wall Street up to 69.5% of the time.

More importantly, it does a better job of representing the market's actual expectations. It has been confirmed by Deutsche Bank Quant. Research and an independent academic study from Rice University that stock prices tend to react with a more strongly associated degree to the expectation benchmark from Estimize than from the Wall Street consensus.

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. Here we are seeing very little difference in revenue expectations while the Estimize profit consensus is slightly higher than Wall Street's.

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The distribution of quarterly loss estimates published by analysts on the Estimize.com platform range from 60c to 63c per share and from $2.000B to $2.039B in revenues. This quarter we're seeing a narrow range estimates on Campbell Soup.

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 narrow distribution of estimates signals more agreement in the market, which could mean less volatility post earnings.

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The Wall Street EPS consensus started and ended the quarter at 59c while the Estimize consensus also dipped before recovering to its initial value of 61c. Meanwhile, Wall Street reduced its revenue consensus from $2.019B to $2.010B while the Estimize consensus rose from $2.014B to $2.017B throughout the quarter. Timeliness is correlated with accuracy and the directionality of analyst revisions going into a report are often a leading indicator. In this case estimate revisions from Wall Street and the Estimize community were moving in opposite directions going into the report.

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The analyst with the highest estimate confidence rating this quarter is 1nvestor who projects 60c EPS and $2.015B in revenue. 1nvestor is ranked 4th overall among over 4,450 contributing analysts. This season 1nvestor has been more accurate than Wall Street in forecasting EPS and revenue an impressive 80% and 65% of the time respectively throughout 120 estimates.

Estimate confidence ratings are calculated through algorithms developed by deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case 1nvestor expects Campbell Soup to beat Wall Street's expectations but fail to live up to the consensus from the Estimize community.

Although Campbell Soup showed a decline in revenue last quarter, the company also managed to exceed Wall Street's expectations on both the top and bottom line while still managing to report growth in profit. On Monday contributing analysts on the Estimize.com platform expect Campbell's to report marginally ahead of revenue estimates while beating the Street's earnings consensus by 2 cents per share.

Disclosure: No positions

Source: Here's Why Investors Expect Another Quarter Of Decline From Campbell Soup

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