Please ensure Javascript is enabled for purposes of website accessibility

What Does Wall Street See for Reynolds American's Q3?

By Seth Jayson - Updated Apr 7, 2017 at 12:20PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Checking expectations

Reynolds American (NYSE: RAI) is expected to report Q3 earnings on Oct. 23. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Reynolds American's revenues will increase 0.1% and EPS will grow 12.9%.

The average estimate for revenue is $2.20 billion. On the bottom line, the average EPS estimate is $0.79.

Revenue details
Last quarter, Reynolds American recorded revenue of $2.18 billion. GAAP reported sales were 4.0% lower than the prior-year quarter's $2.27 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Last quarter, non-GAAP EPS came in at $0.79. GAAP EPS of $0.78 for Q2 were 39% higher than the prior-year quarter's $0.56 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
For the preceding quarter, gross margin was 48.9%, 150 basis points better than the prior-year quarter. Operating margin was 35.5%, 780 basis points better than the prior-year quarter. Net margin was 20.4%, 600 basis points better than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $8.39 billion. The average EPS estimate is $2.96.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 596 members out of 646 rating the stock outperform, and 50 members rating it underperform. Among 205 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 193 give Reynolds American a green thumbs-up, and 12 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Reynolds American is hold, with an average price target of $42.27.

Can your portfolio provide you with enough income to last through retirement? You'll need more than Reynolds American. Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks." Click here for instant access to this free report.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Reynolds American Inc. Stock Quote
Reynolds American Inc.
RAI

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.