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Looking for Stocks with Positive Earnings Momentum? Check Out These 2 Industrial Products Names

Zacks Equity Research
·2 min read

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.

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.

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The final step today is to look at a stock that meets our ESP qualifications. A.O. Smith (AOS) earns a Zacks Rank #3 one day from its next quarterly earnings release on July 28, 2022, and its Most Accurate Estimate comes in at $0.82 a share.

AOS has an Earnings ESP figure of 0.62%, which, as explained above, is calculated by taking the percentage difference between the $0.82 Most Accurate Estimate and the Zacks Consensus Estimate of $0.81.

AOS is one of just a large database of Industrial Products stocks with positive ESPs. Another solid-looking stock is Packaging Corp. (PKG).

Packaging Corp. which is readying to report earnings on October 24, 2022, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $3.24 a share, and PKG is 89 days out from its next earnings report.

The Zacks Consensus Estimate for Packaging Corp. is $3.16, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 2.37%.

AOS and PKG'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
 
A. O. Smith Corporation (AOS) : Free Stock Analysis Report
 
Packaging Corporation of America (PKG) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.