Why TE Connectivity (TEL) Could Beat Earnings Estimates Again

Looking for a stock that might be in a good position to beat earnings at its next report? Consider TE Connectivity Ltd. (NYSE:TEL) , a firm in the Electronics - Miscellaneous Components, which could be a great candidate for another beat.

This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. In fact, in these reports, TEL has beaten estimates by at least 10% in both cases, suggesting it has a nice short-term history of crushing expectations.

Earnings in Focus

Two quarters ago, TEL expected to earnings of $1.00 per share, while it actually produced $1.15 earnings per share, a beat of 15.0%. Meanwhile, for the most recent quarter, the company looked to deliver earnings of $1.08 per share, when it actually saw $1.19 earnings per share instead, representing a 10.2% positive surprise.

Thanks in part to this history, recent estimates have been moving higher for TE Connectivity. In fact, the Earnings ESP for TEL is positive, which is a great sign of a coming beat.

After all, the Zacks Earnings ESP compares the most accurate estimate to the broad consensus, looking to find stocks that have seen big revisions as of late, suggesting that analysts have recently become more bullish on the company’s earnings prospects. This is the case for TEL, as the firm currently has a Zacks Earnings ESP of 2.56%, so another beat could be around the corner.

This is particularly true when you consider that TEL has a great Zacks Rank #3 (Hold) which can be a harbinger of outperformance and a signal for a strong earnings profile. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

When you add this solid Zacks Rank to a positive Earnings ESP, a positive earnings surprise happens nearly 70% of the time, so it seems pretty likely that TEL could see another beat at its next report, especially if recent trends are any guide.

The Best & Worst of Zacks

Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>