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Earnings Season Isn't Over: 3 Stocks That Could Still Beat Estimates
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Second-quarter earnings season is wrapping up, and results have—once again—proven to be relatively strong across the board. Sure, certain industries are struggling, but the economy appears to be healthy and our major indexes are continuing to hover near all-time highs.
With that said, there’s obviously been plenty of positive earnings surprises that have led to skyrocketing share prices. But if you’re worried that you missed out on a chance to profit from an earnings beat, have no fear—earnings season isn’t over just yet.
Luckily, we can use the Zacks Earnings ESP to gauge whether a company is poised to beat earnings estimates. Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst revisions.
This is done because, generally speaking, if an analyst reevaluates their earnings estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
When combining a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks have produced a positive earnings about 70% of the time. Want to target stocks that are more likely to beat estimates before Q2 reporting season is over? Check out these three companies that have yet to report:
Walmart has been pumping a ton of cash into revamping its stores and expanding its e-commerce business. Therefore, it will likely face tough year-over-year comparisons this quarter. In fact, the current Zacks Consensus Estimate is calling for earnings of $1.07 per share, which would represent a decline of nearly 0.5% from the year-ago quarter.
However, analyst sentiment has been improving recently, and the Most Accurate Estimate currently sits a penny higher—giving Walmart a positive Earnings ESP of 0.94%. Combined with the stock’s Zacks Rank #2 (Buy), this should give investors additional confidence heading into its earnings announcement on Thursday morning.
Best known for its line of John Deere agricultural equipment, Deere & Company is scheduled to release its fiscal third-quarter earnings on Friday morning. The Zacks Consensus Estimate is currently calling for earnings of $1.95 per share—a nearly 26% increase from the prior-year result. Deere & Company has also surpassed the Zacks Consensus Estimate by an average of over 70% in each of the trailing four quarters.
Analyst sentiment is strong heading into the report, as we’ve seen three positive estimate revisions in just the past seven days. Additionally, the Most Accurate Estimate sits at $1.98 per share, which gives Deere & Company a positive Earnings ESP of 1.54%. This fact, along with the stock’s Zacks Rank #2 (Buy) and the company’s strong earnings surprise history, should have investors more confident about the chances of a beat.
The retail sector has had a tough earnings season, but Best Buy has proven its ability to fend off competition from the likes of Amazon (AMZN - Free Report) recently. In fact, the company has surpassed consensus estimates by an average of nearly 34% in each of the last four quarters. This quarter, the Zacks Consensus Estimate is calling for earnings of $0.63 per share, which would represent year-over-year growth of just over 10%.
Best Buy is scheduled to announce its earnings results before the market opens on August 29, and heading into the report, the company is sporting a positive Earnings ESP of 1.59%. The stock also has an “A” grade for Value in our Style Scores system, and its Zacks Rank #2 (Buy) is looking strong as we approach its report date.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
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Earnings Season Isn't Over: 3 Stocks That Could Still Beat Estimates
Second-quarter earnings season is wrapping up, and results have—once again—proven to be relatively strong across the board. Sure, certain industries are struggling, but the economy appears to be healthy and our major indexes are continuing to hover near all-time highs.
With that said, there’s obviously been plenty of positive earnings surprises that have led to skyrocketing share prices. But if you’re worried that you missed out on a chance to profit from an earnings beat, have no fear—earnings season isn’t over just yet.
Luckily, we can use the Zacks Earnings ESP to gauge whether a company is poised to beat earnings estimates. Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst revisions.
This is done because, generally speaking, if an analyst reevaluates their earnings estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
When combining a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks have produced a positive earnings about 70% of the time. Want to target stocks that are more likely to beat estimates before Q2 reporting season is over? Check out these three companies that have yet to report:
1. Walmart Stores, Inc. (WMT - Free Report)
Walmart has been pumping a ton of cash into revamping its stores and expanding its e-commerce business. Therefore, it will likely face tough year-over-year comparisons this quarter. In fact, the current Zacks Consensus Estimate is calling for earnings of $1.07 per share, which would represent a decline of nearly 0.5% from the year-ago quarter.
However, analyst sentiment has been improving recently, and the Most Accurate Estimate currently sits a penny higher—giving Walmart a positive Earnings ESP of 0.94%. Combined with the stock’s Zacks Rank #2 (Buy), this should give investors additional confidence heading into its earnings announcement on Thursday morning.
2. Deere & Company (DE - Free Report)
Best known for its line of John Deere agricultural equipment, Deere & Company is scheduled to release its fiscal third-quarter earnings on Friday morning. The Zacks Consensus Estimate is currently calling for earnings of $1.95 per share—a nearly 26% increase from the prior-year result. Deere & Company has also surpassed the Zacks Consensus Estimate by an average of over 70% in each of the trailing four quarters.
Analyst sentiment is strong heading into the report, as we’ve seen three positive estimate revisions in just the past seven days. Additionally, the Most Accurate Estimate sits at $1.98 per share, which gives Deere & Company a positive Earnings ESP of 1.54%. This fact, along with the stock’s Zacks Rank #2 (Buy) and the company’s strong earnings surprise history, should have investors more confident about the chances of a beat.
3. Best Buy Co., Inc. (BBY - Free Report)
The retail sector has had a tough earnings season, but Best Buy has proven its ability to fend off competition from the likes of Amazon (AMZN - Free Report) recently. In fact, the company has surpassed consensus estimates by an average of nearly 34% in each of the last four quarters. This quarter, the Zacks Consensus Estimate is calling for earnings of $0.63 per share, which would represent year-over-year growth of just over 10%.
Best Buy is scheduled to announce its earnings results before the market opens on August 29, and heading into the report, the company is sporting a positive Earnings ESP of 1.59%. The stock also has an “A” grade for Value in our Style Scores system, and its Zacks Rank #2 (Buy) is looking strong as we approach its report date.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaries," but that should still leave plenty of money for regular investors who make the right trades early.See Zacks' 3 Best Stocks to Play This Trend >>