The Zacks Analyst Blog Highlights: Expedia, Interdigital, Geospace, Autodesk and Equity Residential
CHICAGO, Feb. 5, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Expedia Inc. (Nasdaq: EXPE), Interdigital Inc. (Nasdaq: IDCC), Geospace Tec. Corp. (Nasdaq: GEOS), Autodesk Inc. (Nasdaq: ADSK) and Equity Residential (NYSE: EQR).
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Here are highlights from Monday's Analyst Blog:
Upbeat on Expedia's 4Q
We expect online travel company Expedia Inc. (Nasdaq: EXPE) to beat expectations when it reports fourth quarter 2012 results on Feb 5.
Why a Likely Positive Surprise?
Our proven model shows that Expedia is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: The Expected Surprise Prediction or ESP (Read: Zacks Earnings ESP: A Better Method), which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +3.64%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.
Zacks Rank #3 (Hold): Note that stocks with a Zacks Rank #1, #2 and #3 have a significantly higher chance of beating earnings estimates. The sell-rated stocks (Zacks Rank #4 and #5) should never be considered going into an earnings announcement.
The combination of Expedia's Zacks Rank #3 (Hold) and an ESP +3.64% makes us reasonably confident in looking for a positive earnings beat on Feb 5.
What is Driving the Better-Than-Expected Earnings?
Expedia's impressive business strategy, a stronger travel market all over the world, contribution from VIA (acquired in April 2012), strength in the company's hotel business and strategic expansion in Asia are expected to drive results in the upcoming quarter.
We see potential for strong bookings and accelerated share gains on the company's recent acquisitions and agreements that will likely expand its addressable market. The company is taking measures to expand in the Asia/Pacific region, which is likely to remain one of the strongest drivers of the company's business over the next few quarters, particularly since online penetration in many Asia/Pacific markets remains relatively low.
As the shift from offline channels continues, with consumers preferring to use the Internet for making travel plans, Expedia will continue to see opportunities in the online travel market. The positive trend is seen in the trailing four-quarter average surprise of 64.97%. We expect Expedia to continue on the growth path.
Other Stocks to Consider
Expedia is not the only firm looking up this earnings season. We also see likely earnings beats coming from these companies:
Interdigital Inc. (Nasdaq: IDCC), a Zacks Rank #2 (Buy) with an ESP of +350.0%.
Geospace Tec. Corp. (Nasdaq: GEOS), a Zacks Rank #2 (Buy) with an ESP of +16.95%.
Autodesk Inc. (Nasdaq: ADSK), a Zacks Rank #2 (Buy) with an ESP of +15.79%.
Will Equity Residential Beat in 4Q?
We expect leading multi-family real estate investment trust (REIT) – Equity Residential (NYSE: EQR) –to beat expectations when it reports fourth-quarter 2012 results after the closing bell tomorrow, Feb 5.
Why a Likely Positive Surprise? Our proven model shows that Equity Residential is likely to beat earnings because it has the appropriate combination of two key ingredients:
Positive Zacks ESP: Earnings ESP (Read: Zacks Earnings ESP: A Better Method) is +2.67% as the Most Accurate Estimate stands at 77 cents per share and the Zacks Consensus Estimate is 75 cents. This indicates a likely positive earnings surprise.
Zacks Rank #3 (Hold): Equity Residential's Zacks Rank # 3 increases the predictive power of its ESP. The combination of its Zacks Rank and Earnings ESP makes us confident of a positive earnings surprise in the to-be-reported quarter.
Stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings. The sell rated stocks (#4 and #5) should never be considered going into an earnings announcement.
Key Earnings Drivers
Equity Residential is well poised to maintain its growth curve backed by its diverse portfolio of properties in some of the best long-term apartment markets in the country. Moreover, the strengthening apartment fundamentals and superior execution of pricing and expense control measures are expected to lead to a positive earnings surprise in the fourth quarter.
The company is actively repositioning its portfolio, which will further strengthen its presence in the upscale region. In addition, the sale of non-core assets and the Archstone acquisition fit well with its growth strategy.
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