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Want Better Returns? Don?t Ignore These 2 Consumer Staples 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.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.
The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.
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.
In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.
Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), 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 Altria?
The final step today is to look at a stock that meets our ESP qualifications. Altria (MO - Free Report) earns a #3 (Hold) six days from its next quarterly earnings release on April 25, 2024, and its Most Accurate Estimate comes in at $1.17 a share.
By taking the percentage difference between the $1.17 Most Accurate Estimate and the $1.15 Zacks Consensus Estimate, Altria has an Earnings ESP of +1.53%. Investors should also know that MO 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.
MO is part of a big group of Consumer Staples stocks that boast a positive ESP, and investors may want to take a look at Philip Morris (PM - Free Report) as well.
Slated to report earnings on April 23, 2024, Philip Morris holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.46 a share four days from its next quarterly update.
The Zacks Consensus Estimate for Philip Morris is $1.41, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +3.75%.
MO and PM'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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Want Better Returns? Don?t Ignore These 2 Consumer Staples 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.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.
The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.
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.
In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.
Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), 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 Altria?
The final step today is to look at a stock that meets our ESP qualifications. Altria (MO - Free Report) earns a #3 (Hold) six days from its next quarterly earnings release on April 25, 2024, and its Most Accurate Estimate comes in at $1.17 a share.
By taking the percentage difference between the $1.17 Most Accurate Estimate and the $1.15 Zacks Consensus Estimate, Altria has an Earnings ESP of +1.53%. Investors should also know that MO 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.
MO is part of a big group of Consumer Staples stocks that boast a positive ESP, and investors may want to take a look at Philip Morris (PM - Free Report) as well.
Slated to report earnings on April 23, 2024, Philip Morris holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.46 a share four days from its next quarterly update.
The Zacks Consensus Estimate for Philip Morris is $1.41, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +3.75%.
MO and PM'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 >>