Goldman Ahead Of Earnings The records have shown that a companys historical track record of earnings beats is the most important determinant of whether the stock will beat again the next quarter. Clearly, Goldman has an outstanding record of beating analyst estimates with 11 straight EPS beats and three consecutive revenue beats. The last quarter EPS and revenue beats were very large as well, which bodes well for this upcoming release. Goldmans stellar record of beating estimates is supplemented with solid EPS and revenue growth rates. The companys strong price performance in the face of an overall market correction shows that investors have been unwilling to dump the stock ahead of the release. Both of these facts make it all the more likely that this release will be very strong. To summarize, Goldman beats the EPS estimates 73% of the time and revenue estimates 67% of the time, with the EPS beat coming in at 10% and the revenue beat coming in at 4.5%. If this happens as forecasted, this could boost Goldmans share price, especially in light of the recent market downturn. Zacks and Estimize are both predicting EPS beats of 1.3% and 16% respectively. Additionally, analysts have revised their earnings estimates up 10 times in the last 30 days for the company, according to Yahoo Finance. Keep in mind that this is a speculative play and one should only use risk capital for the trade. But I believe there is a good chance that traders will be rewarded after the announcement. Consider purchasing a short term in the money call to profit from an uptick after the announcement. Keep in mind that their will be a decline in volatility right after the numbers are posted.
Posted on: Tue, 14 Oct 2014 03:00:00 +0000
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