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These 2 Consumer Discretionary Stocks Could Beat Earnings: Why They 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.
Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.
The Zacks Earnings ESP, Explained
The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.
Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.
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 #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, 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 Nike?
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Nike (NKE - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $0.58 a share, just 12 days from its upcoming earnings release on March 21, 2023.
NKE has an Earnings ESP figure of +15.69%, which, as explained above, is calculated by taking the percentage difference between the $0.58 Most Accurate Estimate and the Zacks Consensus Estimate of $0.50. Nike is one of a large database 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.
NKE is one of just a large database of Consumer Discretionary stocks with positive ESPs. Another solid-looking stock is Whirlpool (WHR - Free Report) .
Whirlpool is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on April 24, 2023. WHR's Most Accurate Estimate sits at $2.10 a share 46 days from its next earnings release.
Whirlpool's Earnings ESP figure currently stands at +5.53% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.99.
Because both stocks hold a positive Earnings ESP, NKE and WHR 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 >>
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These 2 Consumer Discretionary Stocks Could Beat Earnings: Why They 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.
Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.
The Zacks Earnings ESP, Explained
The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.
Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.
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 #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, 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 Nike?
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Nike (NKE - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $0.58 a share, just 12 days from its upcoming earnings release on March 21, 2023.
NKE has an Earnings ESP figure of +15.69%, which, as explained above, is calculated by taking the percentage difference between the $0.58 Most Accurate Estimate and the Zacks Consensus Estimate of $0.50. Nike is one of a large database 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.
NKE is one of just a large database of Consumer Discretionary stocks with positive ESPs. Another solid-looking stock is Whirlpool (WHR - Free Report) .
Whirlpool is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on April 24, 2023. WHR's Most Accurate Estimate sits at $2.10 a share 46 days from its next earnings release.
Whirlpool's Earnings ESP figure currently stands at +5.53% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.99.
Because both stocks hold a positive Earnings ESP, NKE and WHR 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 >>