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These 2 Medical Stocks Could Beat Earnings: Why They Should Be on Your Radar
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Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.
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.
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, 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.
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 system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
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 GSK?
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. GSK (GSK - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $0.84 a share, just 26 days from its upcoming earnings release on January 31, 2024.
GSK has an Earnings ESP figure of +6.71%, which, as explained above, is calculated by taking the percentage difference between the $0.84 Most Accurate Estimate and the Zacks Consensus Estimate of $0.78. GSK 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.
GSK is part of a big group of Medical stocks that boast a positive ESP, and investors may want to take a look at Cigna (CI - Free Report) as well.
Cigna, which is readying to report earnings on February 2, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $6.61 a share, and CI is 28 days out from its next earnings report.
The Zacks Consensus Estimate for Cigna is $6.52, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +1.33%.
GSK and CI'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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These 2 Medical Stocks Could Beat Earnings: Why They Should Be on Your Radar
Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.
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.
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, 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.
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 system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
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 GSK?
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. GSK (GSK - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $0.84 a share, just 26 days from its upcoming earnings release on January 31, 2024.
GSK has an Earnings ESP figure of +6.71%, which, as explained above, is calculated by taking the percentage difference between the $0.84 Most Accurate Estimate and the Zacks Consensus Estimate of $0.78. GSK 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.
GSK is part of a big group of Medical stocks that boast a positive ESP, and investors may want to take a look at Cigna (CI - Free Report) as well.
Cigna, which is readying to report earnings on February 2, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $6.61 a share, and CI is 28 days out from its next earnings report.
The Zacks Consensus Estimate for Cigna is $6.52, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +1.33%.
GSK and CI'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 >>