CHICAGO, Oct. 20, 2014 /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 the International Business Machines Corp. (NYSE:IBM-Free Report), Oracle (NYSE:ORCL-Free Report), Apple Inc. (Nasdaq:AAPL-Free Report) and InvenSense, Inc. (NYSE:INVN-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Friday's Analyst Blog:
Is IBM Poised to Beat This Earnings Season?
International Business Machines Corp. (NYSE:IBM-Free Report) is set to report third quarter 2014 results on Oct 20. Last quarter, it posted a 0.23% positive surprise. The company has posted an average positive earnings surprise of 1.08% over the past four quarters.
Let's see how things are shaping up for this announcement.
Growth Factors This Past Quarter
We believe that IBM's investments in cloud computing, Big Data, mobile and security will continue to boost software and services revenues. The company's research capabilities and the recent investments in chip development are positives over the long term. IBM's revenue growth will continue to benefit from its strong backlog.
The launch of the Internet of Things (IoT) platform called the IoT Foundation as well as the recent partnership with SAP is expected to expand company's portfolio of cloud-related services. The deal with Apple will help it to expand its software, services and consulting business in the enterprise market, going forward.
However, intensifying competition from the likes of Oracle (NYSE:ORCL-Free Report), Hewlett-Packard, SAP and Microsoft remains a major headwind. Further, sluggish IT spending particularly on premise and data center hardware will continue to hurt IBM in the near term.
Earnings Whispers?
Our proven model does not conclusively show that IBM is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at $4.31. Hence, the difference is of 0.00%.
Zacks Rank # 2 (Buy): Though Zacks Ranks #1, 2 or 3 increase the predictive power of ESP, IBM's ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Apple Inc. (Nasdaq:AAPL-Free Report), Earnings ESP of +4.62% and Zacks Rank #2.
InvenSense, Inc. (NYSE:INVN-Free Report), Earnings ESP of +10.00% and Zacks Rank #2.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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SOURCE Zacks Investment Research, Inc.
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