Will Liberty Media Corporation - Liberty Formula One Series A (FWONA) Gain on Rising Earnings Estimates?

Liberty Media Corporation - Liberty Formula One Series A (FWONA) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.

The upward trend in estimate revisions for this company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For Liberty Media Corporation - Liberty Formula One Series A, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The earnings estimate of $0.52 per share for the current quarter represents a change of +420% from the number reported a year ago.

Over the last 30 days, one estimate has moved higher for Liberty Media Corporation - Liberty Formula One Series A compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 36.84%.

Current-Year Estimate Revisions

The company is expected to earn $1.20 per share for the full year, which represents a change of +1023.08% from the prior-year number.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, one estimate has moved up for Liberty Media Corporation - Liberty Formula One Series A versus no negative revisions. This has pushed the consensus estimate 93.55% higher.

Favorable Zacks Rank

The promising estimate revisions have helped Liberty Media Corporation - Liberty Formula One Series An earn a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Investors have been betting on Liberty Media Corporation - Liberty Formula One Series A because of its solid estimate revisions, as evident from the stock's 24.4% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research