Is a Beat in Store for CMS Energy (CMS) in Q2 Earnings?
CMS Energy Corporation CMS is set to report second-quarter 2018 financial results on Jul 26, before the market opens. The company is expected to come up with a positive earnings surprise in this quarter. Last reported quarter, the company delivered an earnings surprise of 4.88%.
What Our Quantitative Model Predicts
Our proven model conclusively shows that CMS Energy is likely to beat on earnings this earnings season. This is because the stock has both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.
Earnings ESP: CMS Energy has an Earnings ESP of +11.26%. This is because the Most Accurate Estimate is pegged at 43 cents, higher than the Zacks Consensus Estimate of 38 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CMS Energy carries a Zacks Rank #2, which increases the predictive power of ESP. Further combined with a positive ESP, makes surprise prediction more feasible.
Conversely, we caution against Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
CMS Energy Corporation Price and EPS Surprise
Factors at Play
CMS Energy has been working to lower operation and maintenance (O&M) costs, which in turn, boost margins of the company. In fact, the company has been able to cut down on O&M costs by 11% since 2013 and by 6.5%, last year. We anticipate similar cost reductions in the company’s upcoming second-quarter results.
CMS Energy announced that it received the final verdict for its electric rate case in late March 2018. Notably, this final order authorized a 10% ROE coupled with $66 million in revenues, this is going to have a positive impact on second quarter earnings.
Other Stocks That Warrant a Look
Here are a few other stocks worth considering in the Utility – Electric Power space as our model shows that these too have the right combination of elements to also beat estimates in the upcoming releases.
Algonquin Power & Utilities Corp. AQN has an Earnings ESP of +15.38% and a Zacks Rank of 1. It is expected to report second-quarter 2018 earnings on Aug 9.
Ameren Corporation AEE has an Earnings ESP of +1.69% and a Zacks Rank of 2. The company is anticipated to report second-quarter 2018 earnings on Aug 3.
CenterPoint Energy, Inc. CNP has an Earnings ESP of +6.01% and is a Zacks 2 Ranked player. It is expected to report second-quarter 2018 earnings on Aug 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
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