Campbell Soup Co. (CPB) is set to report FQ2 2014 earnings before the market opens on Friday, February 14th. Campbell Soup Co. sells food products including its namesake brand of soup, Pepperidge Farm snack food, and its healthy beverages division which includes V8 brand vegetable juice. This quarter Wall Street is expecting 4% growth in EPS and a 3% reduction in revenue compared to FQ2 from last year. Last quarter Campbell missed Wall Street expectations by a significant margin, but this quarter investors expect Campbell to get its earnings per share back on track.
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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The current Wall Street consensus expectation is for CPB to report 73c EPS and $2.266B revenue while the current Estimize.com consensus from Buy Side and Independent contributing analysts is 76c EPS and $2.268B revenue. This quarter the buy-side as represented by the Estimize.com community is expecting CPB to beat Wall Street’s expectations on EPS and exceed by a small margin on revenue.
Throughout the previous 5 quarters the consensus from Estimize.com has been more accurate than Wall Street in forecasting CPB’s EPS and revenue 4 and 2 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 up to 69.5% more accurate than Wall Street, but more importantly it does a better job of representing the market’s actual expectations. It has been confirmed by 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. In this case we are seeing a wider differential than usual on EPS but an extremely small one on revenue.
The distribution of estimates published by analysts on the Estimize.com platform range from 74c to 77c EPS and $2.260B to $2.280B in revenues. This quarter we’re seeing a small distribution of estimates for CPB.
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 narrower distribution of estimates signaling more agreement in the market, which could mean less volatility post earnings.
The analyst with the highest estimate confidence rating this quarter is guggsi who projects 76c EPS and $2.280B in revenue. In the Winter 2014 season guggsi is rated as the 103rd best analyst and is ranked 363rd overall among over 3,850 contributing analysts. 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 guggsi is expecting Campbell’s to report in-line with the Estimize community on EPS and exceed on revenue.
Although Campbell’s missed the Wall Street consensus on EPS by 24c last quarter, this time around contributing analysts on the Estimize.com platform are expecting Campbell’s to beat the Street’s forecast.
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