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This 1 Retail and Wholesale Stock Could Beat Earnings: Why It Should Be on Your Radar
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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.
The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.
The Zacks Earnings ESP, Explained
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. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.
Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest.
Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank.
Should You Consider Cracker Barrel Old Country Store?
The final step today is to look at a stock that meets our ESP qualifications. Cracker Barrel Old Country Store (CBRL - Free Report) earns a #1 (Strong Buy) one day from its next quarterly earnings release on December 2, 2022, and its Most Accurate Estimate comes in at $1.28 a share.
By taking the percentage difference between the $1.28 Most Accurate Estimate and the $1.27 Zacks Consensus Estimate, Cracker Barrel Old Country Store has an Earnings ESP of +0.59%. Investors should also know that CBRL is one of a large group of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
CBRL is just one of a large group of Retail and Wholesale stocks with a positive ESP figure. Asbury Automotive Group (ABG - Free Report) is another qualifying stock you may want to consider.
Asbury Automotive Group, which is readying to report earnings on February 21, 2023, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $8.22 a share, and ABG is 82 days out from its next earnings report.
For Asbury Automotive Group, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $8.18 is +0.51%.
CBRL and ABG'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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This 1 Retail and Wholesale Stock Could Beat Earnings: Why It Should Be on Your Radar
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.
The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.
The Zacks Earnings ESP, Explained
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. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.
Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest.
Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank.
Should You Consider Cracker Barrel Old Country Store?
The final step today is to look at a stock that meets our ESP qualifications. Cracker Barrel Old Country Store (CBRL - Free Report) earns a #1 (Strong Buy) one day from its next quarterly earnings release on December 2, 2022, and its Most Accurate Estimate comes in at $1.28 a share.
By taking the percentage difference between the $1.28 Most Accurate Estimate and the $1.27 Zacks Consensus Estimate, Cracker Barrel Old Country Store has an Earnings ESP of +0.59%. Investors should also know that CBRL is one of a large group of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
CBRL is just one of a large group of Retail and Wholesale stocks with a positive ESP figure. Asbury Automotive Group (ABG - Free Report) is another qualifying stock you may want to consider.
Asbury Automotive Group, which is readying to report earnings on February 21, 2023, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $8.22 a share, and ABG is 82 days out from its next earnings report.
For Asbury Automotive Group, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $8.18 is +0.51%.
CBRL and ABG'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 >>