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How to Find Strong Consumer Staples Stocks Slated for Positive Earnings Surprises

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 last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to look at a qualifying stock. Hormel Foods (HRL) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at $0.36 a share eight days away from its upcoming earnings release on May 30, 2024.

By taking the percentage difference between the $0.36 Most Accurate Estimate and the $0.35 Zacks Consensus Estimate, Hormel Foods has an Earnings ESP of 2.13%.

HRL is just one of a large group of Consumer Staples stocks with a positive ESP figure. Anheuser-Busch Inbev (BUD) is another qualifying stock you may want to consider.

Anheuser-Busch Inbev, which is readying to report earnings on August 1, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.86 a share, and BUD is 71 days out from its next earnings report.

For Anheuser-Busch Inbev, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.84 is 2.38%.

HRL and BUD'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

Hormel Foods Corporation (HRL) : Free Stock Analysis Report

Anheuser-Busch InBev SA/NV (BUD) : Free Stock Analysis Report

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Zacks Investment Research