Why They Should Be on Your Radar

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Why They Should Be on Your Radar

Earnings are arguably the most important single number on a company’s quarterly financial report. Wall Street clearly dives into all of the other metrics and management’s input, but the EPS figure helps cut through all the noise.

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.

2 Stocks to Add to Your Watchlist

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. The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction.

The final step today is to look at a stock that meets our ESP qualifications. NextEra Energy (NEE) earns a Zacks Rank #3 two days from its next quarterly earnings release on July 24, 2024, and its Most Accurate Estimate comes in at $0.94 a share.

NEE has an Earnings ESP figure of 1.44%, which, as explained above, is calculated by taking the percentage difference between the $0.94 Most Accurate Estimate and the Zacks Consensus Estimate of $0.93.

NEE is part of a big group of Utilities stocks that boast a positive ESP, and investors may want to take a look at BCE (BCE) as well.

Slated to report earnings on August 1, 2024, BCE holds a #3 (Hold) ranking on the Zacks Rank, and it’s Most Accurate Estimate is $0.59 a share 10 days from its next quarterly update.

BCE’s Earnings ESP figure currently stands at 0.28% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.59.

NEE and BCE’s positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

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 >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.

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