How Will Q3 Earnings Treat Nursing Home Stocks BKD, TMH, CSU?

Based on the Earnings Preview report as of Oct 28, 58.2% of the sector participants on the S&P 500 index have already reported their third-quarter numbers. Earnings for these companies have increased 2.2% from the same period last year while revenues are up 1.3%%, per the latest report. Of this, 73.5% reported ahead of EPS estimates and 57.4% surpassed revenue estimates. This reporting cycle has seen more positive surprises and fewer negative revisions to the current-period (2016 Q4) estimates.

Notably, the third quarter is on track to be the first quarter of positive earnings growth after five consecutive quarters of earnings decline for the S&P 500 index. The picture is expected to steadily improve hereafter. Overall, quarterly earnings for the S&P 500 members are now expected to be up 2.0% year over year on 1.4% higher revenues.

Medical is one of the sectors in the S&P 500 cohort that is expected to report growth in earnings in the third quarter. The sector is likely to record earnings growth of 6.0% on revenue improvement of 7.3%.  

Nursing Home, though a small component of the Medical sector, is expected follow the growth trajectory this earnings season.

Here, we take a look at three nursing home stocks scheduled to report their third-quarter figures on Nov 1:

Team Health Holdings Inc. TMH is a supplier of outsourced healthcare professional staffing and administrative services to hospitals and other healthcare providers in the U.S. We believe that increasing patient volume, strategic acquisitions and the implementation of the Bundled Payments for Care Improvement program in collaboration with Remedy Partners are its key positives.
 

TEAM HEALTH HLD Price and EPS Surprise

 

TEAM HEALTH HLD Price and EPS Surprise | TEAM HEALTH HLD Quote

However, our proven model does not conclusively show that the company is likely to beat on earnings, given the combination of an Earnings ESP of 0.00% – as both the Zacks Consensus Estimate and the Most Accurate estimate are pegged at 71 cents – and a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Notably, as per our model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 (Buy) or 3 to beat estimates. Simultaneously, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

We note that the results of Team Health compared favorably with the Zacks Consensus Estimate in the last four quarters, resulting in an average beat of 1.36%.

Brookdale Senior Living Inc. BKD is the largest operator of senior living communities in the U.S. and serves approximately 108,000 residents. Our proven model does not conclusively show that the company is likely to beat on earnings, given the combination of Zacks Rank #4 (Sell) and Earnings ESP of 0.00%. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

Brookdale’s results compared unfavorably with the Zacks Consensus Estimate in the last four quarters, resulting in an average miss of 36.7%.
 

BROOKDALE SENR Price and EPS Surprise

 

BROOKDALE SENR Price and EPS Surprise | BROOKDALE SENR Quote

Capital Senior Living Corporation CSU is one of the largest providers of senior living services in the U.S. The company’s solid occupancy growth, well-organized expense management programs and strategic acquisitions are key growth drivers in our view.

However, our proven model does not conclusively show that the company is likely to beat on earnings, given the combination of a Zacks Rank #5 (Strong Sell) and Earnings ESP of 0.00%. This is because both the Zacks Consensus Estimate and the Most Accurate estimate stand at a loss of a penny per share.

We note that Capital Senior Living’s results compared favorably with the Zacks Consensus Estimate in the last four quarters, with an average beat of 106.25%.

CAPITAL SR LIVG Price and EPS Surprise

 

CAPITAL SR LIVG Price and EPS Surprise | CAPITAL SR LIVG Quote

Stay tuned! Check back on our full write-up on these earnings releases.

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CAPITAL SR LIVG (CSU): Free Stock Analysis Report
 
BROOKDALE SENR (BKD): Free Stock Analysis Report
 
TEAM HEALTH HLD (TMH): Free Stock Analysis Report
 
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