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How to Find Strong Oils and Energy Stocks Slated for Positive Earnings Surprises
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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 is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.
With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
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.
Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.
Should You Consider Marathon Petroleum?
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. Marathon Petroleum (MPC - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $7.58 a share, just 29 days from its upcoming earnings release on October 31, 2023.
By taking the percentage difference between the $7.58 Most Accurate Estimate and the $7.20 Zacks Consensus Estimate, Marathon Petroleum has an Earnings ESP of +5.23%. Investors should also know that MPC 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.
MPC is one of just a large database of Oils and Energy stocks with positive ESPs. Another solid-looking stock is Devon Energy (DVN - Free Report) .
Devon Energy is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on November 7, 2023. DVN's Most Accurate Estimate sits at $1.50 a share 36 days from its next earnings release.
The Zacks Consensus Estimate for Devon Energy is $1.48, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +1.88%.
MPC and DVN's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
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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How to Find Strong Oils and Energy Stocks Slated for Positive Earnings Surprises
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 is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.
With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
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.
Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.
Should You Consider Marathon Petroleum?
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. Marathon Petroleum (MPC - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $7.58 a share, just 29 days from its upcoming earnings release on October 31, 2023.
By taking the percentage difference between the $7.58 Most Accurate Estimate and the $7.20 Zacks Consensus Estimate, Marathon Petroleum has an Earnings ESP of +5.23%. Investors should also know that MPC 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.
MPC is one of just a large database of Oils and Energy stocks with positive ESPs. Another solid-looking stock is Devon Energy (DVN - Free Report) .
Devon Energy is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on November 7, 2023. DVN's Most Accurate Estimate sits at $1.50 a share 36 days from its next earnings release.
The Zacks Consensus Estimate for Devon Energy is $1.48, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +1.88%.
MPC and DVN's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
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 >>