We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
These 2 Finance Stocks Could Beat Earnings: Why They Should Be on Your Radar
Read MoreHide Full Article
Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.
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.
In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 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 Huntington Bancshares?
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. Huntington Bancshares (HBAN - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $0.37 a share, just 30 days from its upcoming earnings release on July 20, 2023.
HBAN has an Earnings ESP figure of +5.38%, which, as explained above, is calculated by taking the percentage difference between the $0.37 Most Accurate Estimate and the Zacks Consensus Estimate of $0.35. Huntington Bancshares 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.
HBAN is just one of a large group of Finance stocks with a positive ESP figure. SL Green (SLG - Free Report) is another qualifying stock you may want to consider.
SL Green is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on July 19, 2023. SLG's Most Accurate Estimate sits at $1.35 a share 29 days from its next earnings release.
The Zacks Consensus Estimate for SL Green is $1.33, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +1.61%.
HBAN and SLG'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 >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
These 2 Finance Stocks Could Beat Earnings: Why They Should Be on Your Radar
Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.
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.
In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 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 Huntington Bancshares?
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. Huntington Bancshares (HBAN - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $0.37 a share, just 30 days from its upcoming earnings release on July 20, 2023.
HBAN has an Earnings ESP figure of +5.38%, which, as explained above, is calculated by taking the percentage difference between the $0.37 Most Accurate Estimate and the Zacks Consensus Estimate of $0.35. Huntington Bancshares 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.
HBAN is just one of a large group of Finance stocks with a positive ESP figure. SL Green (SLG - Free Report) is another qualifying stock you may want to consider.
SL Green is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on July 19, 2023. SLG's Most Accurate Estimate sits at $1.35 a share 29 days from its next earnings release.
The Zacks Consensus Estimate for SL Green is $1.33, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +1.61%.
HBAN and SLG'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 >>