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Want Better Returns? Don?t Ignore These 2 Retail and Wholesale Stocks Set to Beat Earnings
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Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.
Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.
The Zacks Earnings ESP, Explained
The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.
Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.
When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% annual returns on average, according to our 10 year backtest.
Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, or the top 15% and top 5% of stocks, respectively, should outperform the market. Strong Buy stocks should outperform more than any other rank.
Should You Consider American Eagle Outfitters?
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. American Eagle Outfitters (AEO - Free Report) earns a #1 (Strong Buy) right now and its Most Accurate Estimate sits at $0.30 a share, just 15 days from its upcoming earnings release on May 22, 2024.
By taking the percentage difference between the $0.30 Most Accurate Estimate and the $0.27 Zacks Consensus Estimate, American Eagle Outfitters has an Earnings ESP of +11.11%. Investors should also know that AEO is one of a large group of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
AEO is just one of a large group of Retail and Wholesale stocks with a positive ESP figure. Brinker International (EAT - Free Report) is another qualifying stock you may want to consider.
Slated to report earnings on August 21, 2024, Brinker International holds a #1 (Strong Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.47 a share 106 days from its next quarterly update.
For Brinker International, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.42 is +3.44%.
Because both stocks hold a positive Earnings ESP, AEO and EAT could potentially post earnings beats in their next reports.
Find Stocks to Buy or Sell Before They're Reported
Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>
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Want Better Returns? Don?t Ignore These 2 Retail and Wholesale Stocks Set to Beat Earnings
Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.
Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.
The Zacks Earnings ESP, Explained
The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.
Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.
When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% annual returns on average, according to our 10 year backtest.
Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, or the top 15% and top 5% of stocks, respectively, should outperform the market. Strong Buy stocks should outperform more than any other rank.
Should You Consider American Eagle Outfitters?
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. American Eagle Outfitters (AEO - Free Report) earns a #1 (Strong Buy) right now and its Most Accurate Estimate sits at $0.30 a share, just 15 days from its upcoming earnings release on May 22, 2024.
By taking the percentage difference between the $0.30 Most Accurate Estimate and the $0.27 Zacks Consensus Estimate, American Eagle Outfitters has an Earnings ESP of +11.11%. Investors should also know that AEO is one of a large group of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
AEO is just one of a large group of Retail and Wholesale stocks with a positive ESP figure. Brinker International (EAT - Free Report) is another qualifying stock you may want to consider.
Slated to report earnings on August 21, 2024, Brinker International holds a #1 (Strong Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.47 a share 106 days from its next quarterly update.
For Brinker International, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.42 is +3.44%.
Because both stocks hold a positive Earnings ESP, AEO and EAT could potentially post earnings beats in their next reports.
Find Stocks to Buy or Sell Before They're Reported
Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>