Can CR Bard (BCR) Spring A Surprise This Earnings Season?

CR Bard Inc. (NYSE:BCR) is scheduled to report third-quarter 2017 earnings, after market closes on Oct 24. Last quarter, the company reported adjusted earnings of $2.92, exceeding the Zacks Consensus Estimate by 8 cents. Also, the company’s earnings surpassed the Zacks Consensus Estimate in all the last four quarters with an average beat of 4.03%.

Delving into the fundamentals of the stock, let’s see how things are shaping up prior to this release.

Factors at Play

We believe that the growing adoption of the company’s flagship Lutonix drug coated-balloon (DCB) will continue to be the key growth catalyst in the to-be-reported quarter. In this regard, Lutonix DCB is used to treat patients suffering from peripheral arterial disease (PAD). Within the Endovascular business, peripheral PTA line sales are solely driven by accelerating demand for the Lutonix DCB in the United States. We expect this product to significantly contribute to the company’s top line in this quarter. The Zacks Consensus Estimate for the third-quarter revenues is currently pegged at $989.8 million, up 5.1%.

However, the management expects revenues growth of 5% to 6% on a reported basis. Excluding the impact of foreign exchange, the company projects revenues to increase between 6% and 7% from the prior year.
Furthermore, the company's investments in emerging markets have strengthened its position internationally. We are also upbeat on the solid contribution from the company’s vascular product line. The urology and oncology segments are likely to drive third-quarter sales.

On a positive note, the company portrays an impressive price performance. In the past three months, shares of CR Bard have returned 1.0% compared with the industry’s decline of 4.7%.

On the flip side, a challenging Med-tech environment, especially in the hernia fixation and peripheral stent businesses raises concerns. The company continues to witness significant pricing pressure as well. Also, unfavorable foreign currency will continue to hurt top- and bottom-line growth.

Furthermore, uncertainties associated with the possibilities of a repeal of the Affordable Care Act under President Trump add to the company’s concerns.

Earnings Whispers

Our quantitative model doesn’t point to an earnings beat either this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: The Earnings ESP for CR Bard is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $2.95. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CR Bard currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.

We caution against stocks with a Zacks Ranks #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

C.R. Bard, Inc. Price and EPS Surprise

C.R. Bard, Inc. Price and EPS Surprise | C.R. Bard, Inc. Quote

Stocks to Consider

Here are a few companies you may want to consider as our proven model shows that they have the right combination of elements to post an earnings beat this quarter:

Abbott (NYSE:ABT) has an Earnings ESP of +0.17% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Align Technology, Inc (NASDAQ:ALGN) has an Earnings ESP of +2.06% and carries a Zacks Rank #3.

Henry Schein, Inc (NASDAQ:HSIC) has an Earnings ESP of +0.33% and carries a Zacks Rank #3.

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