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Want Better Returns? Don't Ignore These 2 Oils-Energy Stocks Set to Beat Earnings

Zacks Equity Research
·3 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.

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 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.

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. Chesapeake Energy (CHK) holds a Zacks Rank #2 at the moment and its Most Accurate Estimate comes in at $4.55 a share 13 days away from its upcoming earnings release on November 1, 2022.

CHK has an Earnings ESP figure of 0.85%, which, as explained above, is calculated by taking the percentage difference between the $4.55 Most Accurate Estimate and the Zacks Consensus Estimate of $4.52.

CHK is part of a big group of Oils-Energy stocks that boast a positive ESP, and investors may want to take a look at Northern Oil and Gas (NOG) as well.

Northern Oil and Gas, which is readying to report earnings on November 4, 2022, sits at a Zacks Rank #2 (Buy) right now. It's Most Accurate Estimate is currently $1.80 a share, and NOG is 16 days out from its next earnings report.

For Northern Oil and Gas, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.74 is 3.51%.

Because both stocks hold a positive Earnings ESP, CHK and NOG could potentially post earnings beats in their next reports.

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
 
Chesapeake Energy Corporation (CHK) : Free Stock Analysis Report
 
Northern Oil and Gas, Inc. (NOG) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research