Boeing (BA) is expected to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended September 2020. This widely known consensus outlook gives a good sense of the company’s earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.
The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on October 28. On the other hand, if they miss, the stock may move lower.
While management’s discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it is worth having a handicapping insight into the odds of a positive EPS surprise.
Zacks Consensus Estimate:
This airplane builder is expected to post a quarterly loss of $2.23 per share in its upcoming report, which represents a year-over-year change of -253.8%.
Revenues are expected to be $14.14 billion, down 29.2% from the year-ago quarter.
Estimate Revisions Trend:
The consensus EPS estimate for the quarter has been revised 21.06% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.
How Have the Numbers Shaped Up for Boeing?
For Boeing, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company’s earnings prospects. This has resulted in an Earnings ESP of +9.58%.
Does Earnings Surprise History Hold Any Clue?
While calculating estimates for a company’s future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it’s worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Boeing would post a loss of $2.93 per share when it produced a loss of $4.79, delivering a surprise of -63.48%.
Earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help several stocks gain despite an earnings miss.
Boeing does not appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Boeing Short (Sell)
ENTER AT: 155.12