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These 2 Finance Stocks Could Beat Earnings: Why They Should Be on Your Radar

Zacks Equity Research
·2 min read

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, 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 even higher.

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.

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The final step today is to look at a stock that meets our ESP qualifications. Mid-America Apartment Communities (MAA) earns a Zacks Rank #2 21 days from its next quarterly earnings release on October 26, 2022, and its Most Accurate Estimate comes in at $2.12 a share.

Mid-America Apartment Communities' Earnings ESP sits at 1.31%, which, as explained above, is calculated by taking the percentage difference between the $2.12 Most Accurate Estimate and the Zacks Consensus Estimate of $2.09.

MAA is one of just a large database of Finance stocks with positive ESPs. Another solid-looking stock is Regions Financial (RF).

Slated to report earnings on October 21, 2022, Regions Financial holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.61 a share 16 days from its next quarterly update.

The Zacks Consensus Estimate for Regions Financial is $0.60, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 1.51%.

MAA and RF'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 >>


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
 
MidAmerica Apartment Communities, Inc. (MAA) : Free Stock Analysis Report
 
Regions Financial Corporation (RF) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research