Negative Price Reaction to Follow Ford Earnings?

Ford (F) is expected to report earnings on Tuesday, July 28th. The whisper number is $0.42, five cents ahead of the analysts’ estimate and showing strong confidence from the WhisperNumber community. Whispers range from a low of $0.40 to a high of $0.48. Ford has a 71% positive surprise history (having topped the whisper in 35 of the 49 earnings reports for which we have data).

Earnings history:

– Beat whisper: 35 qtrs
– Met whisper: 3 qtrs
– Missed whisper: 11 qtrs

Our primary focus is on post earnings price movement. Knowing how likely a stock’s price will move following an earnings report can help you determine the best action to take (long or short). In other words, we analyze what happens when the company beats or misses the whisper number expectation.

The table below indicates the average post earnings price movement within a one and thirty trading day timeframe:

F715A

The strongest price movement of -0.9% comes within one trading day when the company reports earnings that beat the whisper number, and -13.2% within ten trading days when the company reports earnings that miss the whisper number. The overall average post earnings price move is ‘negative’ (beat the whisper number and see weakness, miss and see weakness) when the company reports earnings.

The table below indicates the most recent earnings reports and short-term price reaction:

F715B

The company has reported earnings ahead of the whisper number in three of the past four quarters with a whisper number. In the comparable quarter last year the company reported earnings one cent ahead of the whisper number. Following that report the stock realized a 2.4% loss in five trading days. Last quarter the company reported earnings five cents short of the whisper number. Following that report the stock realized a 0.8% gain in one trading day. Overall historical data indicates the company to be (on average within thirty trading days) a ‘negative’ price reactor when the company reports earnings.

WhisperNumber provides detailed earnings analysis and earnings trade alerts. Learn more here.

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