The Zacks Analyst Blog Highlights:Comcast, Marathon Petroleum, BP, Exterran Partners and SemGroup
CHICAGO, April 30, 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 Comcast Corporation (Nasdaq: CMCSA), Marathon Petroleum Corporation (NYSE: MPC), BP plc (NYSE: BP), Exterran Partners L.P. (Nasdaq: EXLP) and SemGroup Corp. (NYSE: SEMG).
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Here are highlights from Monday's Analyst Blog:
Will Comcast Beat Earnings?
Comcast Corporation (Nasdaq: CMCSA) – the largest cable MSO in the U.S. – is set to release its first-quarter 2013 results before the opening bell on May 1, 2013.
Why a Likely Positive Surprise?
Our proven model shows that Comcast is likely to beat earnings because it has the right combination of two key ingredients.
Positive Zacks ESP: 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 +4.08%. This is a meaningful and leading indicator of a likely positive earnings surprise.
Zacks #3 Rank (Hold): Comcast currently has a Zacks Rank #3. Note that the stocks with Zacks Rank #1 (Strong Buy), 2 (Buy) and 3 (Hold) have a significantly higher chance of beating the earnings.
The combination of Comcast's Zacks Rank #3 (Hold) and +4.08% ESP makes us confident of a positive earnings beat on May 1, 2013.
What is Driving the Better-Than-Expected Earnings?
Comcast's Cable business continued to beat market expectations and the NBC Universal division made a solid turnaround. In spite of challenges, the struggling video operation continued its positive momentum. Comcast has also completed its major technical innovations, such as DOCSIS 3.0, all digital networks and a multi-platform content delivery network.
Moreover, several newly-launched services, such as Xfinity Home, Wi-Fi, X1 and high-speed Metro Ethernet will act as long-term growth catalysts for the company.
On the downside, persistent loss of video subscribers affects Comcast as customers are opting for cheaper video streaming service providers like Netflix, Hulu.Com and YouTube.
Marathon Petroleum to Beat Earnings
We expect independent oil refiner and marketer Marathon Petroleum Corporation (NYSE: MPC) to beat expectations when it reports first quarter 2013 results before the opening bell on Tuesday, Apr 30.
Why a Likely Positive Surprise?
Our proven model shows that Marathon Petroleum is likely to beat earnings because it has the right combination of two key ingredients.
Positive Zacks ESP: Earnings Expected Surprise Prediction or ESP (Read: Zacks Earnings ESP: A Better Method), the difference between the Most Accurate estimate of $2.19 and the Zacks Consensus Estimate of $2.14, stands at +2.34%.
Zacks Rank #2 (Buy): Note that 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.
The combination ofMarathon Petroleum's Zacks Rank #2 (Buy) and +2.34% ESP makes us confident in looking for of a positive earnings beat this release.
What's Driving Better-than-Expected Earnings?
Marathon Petroleum is the fifth largest domestic refiner with a combined crude oil processing capacity of approximately 1,193,000 barrels per day through its portfolio of six refineries. A major advantage for the company is its proprietary access to pipelines, which inhibit lower-cost competitors from supplying to Marathon Petroleum's key markets.
Marathon Petroleum delivered solid earnings results in the fourth quarter, beating the Zacks Consensus Estimate by 8.13%. In fact, it delivered positive earnings surprises in 3 of the past 4 quarters, leading to a positive average earnings surprise of 10.55%.
Additionally, Marathon Petroleum's recent purchase of BP plc's (NYSE: BP) Texas City refinery – one of the largest and most complex in the country – will help the company to solidify its position in the fuel export business, apart from increasing production flexibility.
Moreover, the company possesses one of the healthiest balance sheets among peers and a robust free cash flow generating ability. The ongoing buyback program highlights Marathon Petroleum's commitment to create value for shareholders.
Other Stocks to Consider
Here are some other energy firms that warrant a look as these have the right ingredients to report earnings beat this quarter:
Exterran Partners L.P. (Nasdaq: EXLP) has an earnings ESP of +4.35% and a Zacks Rank #1 (Strong Buy).
SemGroup Corp. (NYSE: SEMG) has an earnings ESP of +28.95% and a Zacks Rank #1 (Strong Buy).
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