Okronos Worldwide (KRO) is predicted to ship a year-over-year improve in earnings on greater revenues when it reviews outcomes for the quarter ended June 2021. This widely-known consensus outlook offers a very good sense of the corporate’s earnings image, however how the precise outcomes evaluate to those estimates is a robust issue that might affect its near-term inventory worth.
The earnings report would possibly assist the inventory transfer greater if these key numbers are higher than expectations. However, in the event that they miss, the inventory could transfer decrease.
Whereas administration’s dialogue of enterprise situations on the earnings name will largely decide the sustainability of the fast worth change and future earnings expectations, it is price having a handicapping perception into the chances of a constructive EPS shock.
Zacks Consensus Estimate
This maker of titanium dioxide pigments is predicted to put up quarterly earnings of $0.26 per share in its upcoming report, which represents a year-over-year change of +62.5%.
Revenues are anticipated to be $483.43 million, up 25.2% from the year-ago quarter.
Estimate Revisions Development
The consensus EPS estimate for the quarter has remained unchanged over the past 30 days. That is primarily a mirrored image of how the overlaying analysts have collectively reassessed their preliminary estimates over this era.
Buyers ought to take into account that an combination change could not all the time mirror the course of estimate revisions by every of the overlaying analysts.
Worth, Consensus and EPS Shock
Earnings Whisper
Estimate revisions forward of an organization’s earnings launch provide clues to the enterprise situations for the interval whose outcomes are popping out. This perception is on the core of our proprietary shock prediction mannequin — the Zacks Earnings ESP (Anticipated Shock Prediction).
The Zacks Earnings ESP compares the Most Correct Estimate to the Zacks Consensus Estimate for the quarter; the Most Correct Estimate is a more moderen model of the Zacks Consensus EPS estimate. The thought right here is that analysts revising their estimates proper earlier than an earnings launch have the most recent data, which might probably be extra correct than what they and others contributing to the consensus had predicted earlier.
Thus, a constructive or adverse Earnings ESP studying theoretically signifies the seemingly deviation of the particular earnings from the consensus estimate. Nonetheless, the mannequin’s predictive energy is critical for constructive ESP readings solely.
A constructive Earnings ESP is a powerful predictor of an earnings beat, notably when mixed with a Zacks Rank #1 (Sturdy Purchase), 2 (Purchase) or 3 (Maintain). Our analysis reveals that shares with this mix produce a constructive shock practically 70% of the time, and a stable Zacks Rank really will increase the predictive energy of Earnings ESP.
Please notice {that a} adverse Earnings ESP studying will not be indicative of an earnings miss. Our analysis reveals that it’s troublesome to foretell an earnings beat with any diploma of confidence for shares with adverse Earnings ESP readings and/or Zacks Rank of 4 (Promote) or 5 (Sturdy Promote).
How Have the Numbers Formed Up for Kronos Worldwide?
For Kronos Worldwide, the Most Correct Estimate is identical because the Zacks Consensus Estimate, suggesting that there aren’t any latest analyst views which differ from what have been thought-about to derive the consensus estimate. This has resulted in an Earnings ESP of 0%.
However, the inventory at the moment carries a Zacks Rank of #3.
So, this mix makes it troublesome to conclusively predict that Kronos Worldwide will beat the consensus EPS estimate.
Does Earnings Shock Historical past Maintain Any Clue?
Analysts usually take into account to what extent an organization has been capable of match consensus estimates prior to now whereas calculating their estimates for its future earnings. So, it is price looking on the shock historical past for gauging its affect on the upcoming quantity.
For the final reported quarter, it was anticipated that Kronos Worldwide would put up earnings of $0.22 per share when it really produced earnings of $0.17, delivering a shock of -22.73%.
Over the past 4 quarters, the corporate has crushed consensus EPS estimates 3 times.
Backside Line
An earnings beat or miss is probably not the only foundation for a inventory shifting greater or decrease. Many shares find yourself shedding floor regardless of an earnings beat as a result of different components that disappoint buyers. Equally, unexpected catalysts assist quite a few shares acquire regardless of an earnings miss.
That mentioned, betting on shares which are anticipated to beat earnings expectations does improve the chances of success. This is the reason it is price checking an organization’s Earnings ESP and Zacks Rank forward of its quarterly launch. Ensure to make the most of our Earnings ESP Filter to uncover one of the best shares to purchase or promote earlier than they’ve reported.
Kronos Worldwide does not seem a compelling earnings-beat candidate. Nonetheless, buyers ought to take note of different components too for betting on this inventory or staying away from it forward of its earnings launch.
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The views and opinions expressed herein are the views and opinions of the creator and don’t essentially mirror these of Nasdaq, Inc.