Yahoo Finance How to Boost Your Portfolio with Top Finance Stocks Set to Beat Earnings
Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.
2 Stocks to Add to Your Watchlist
The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more 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.
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. CME Group (CME) earns a Zacks Rank #2 right now and its Most Accurate Estimate sits at $2.31 a share, just seven days from its upcoming earnings release on April 26, 2023.
By taking the percentage difference between the $2.31 Most Accurate Estimate and the $2.29 Zacks Consensus Estimate, CME Group has an Earnings ESP of 0.79%.
CME is one of just a large database of Finance stocks with positive ESPs. Another solid-looking stock is Aflac (AFL).
Aflac is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on April 26, 2023. AFL's Most Accurate Estimate sits at $1.40 a share seven days from its next earnings release.
The Zacks Consensus Estimate for Aflac is $1.38, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 1.2%.
CME and AFL'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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CME Group Inc. (CME) : Free Stock Analysis Report
Aflac Incorporated (AFL) : Free Stock Analysis Report
