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These 2 Industrial Products Stocks Could Beat Earnings: Why They Should Be on Your Radar
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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.
The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.
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.
When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% 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 Deere?
The final step today is to look at a stock that meets our ESP qualifications. Deere (DE - Free Report) earns a #3 (Hold) one day from its next quarterly earnings release on February 15, 2024, and its Most Accurate Estimate comes in at $5.42 a share.
DE has an Earnings ESP figure of +4.37%, which, as explained above, is calculated by taking the percentage difference between the $5.42 Most Accurate Estimate and the Zacks Consensus Estimate of $5.19. Deere 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.
DE is one of just a large database of Industrial Products stocks with positive ESPs. Another solid-looking stock is Eaton (ETN - Free Report) .
Eaton, which is readying to report earnings on May 7, 2024, sits at a Zacks Rank #2 (Buy) right now. It's Most Accurate Estimate is currently $2.26 a share, and ETN is 83 days out from its next earnings report.
For Eaton, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.26 is +0.04%.
Because both stocks hold a positive Earnings ESP, DE and ETN 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 Industrial Products 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.
The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.
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.
When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% 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 Deere?
The final step today is to look at a stock that meets our ESP qualifications. Deere (DE - Free Report) earns a #3 (Hold) one day from its next quarterly earnings release on February 15, 2024, and its Most Accurate Estimate comes in at $5.42 a share.
DE has an Earnings ESP figure of +4.37%, which, as explained above, is calculated by taking the percentage difference between the $5.42 Most Accurate Estimate and the Zacks Consensus Estimate of $5.19. Deere 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.
DE is one of just a large database of Industrial Products stocks with positive ESPs. Another solid-looking stock is Eaton (ETN - Free Report) .
Eaton, which is readying to report earnings on May 7, 2024, sits at a Zacks Rank #2 (Buy) right now. It's Most Accurate Estimate is currently $2.26 a share, and ETN is 83 days out from its next earnings report.
For Eaton, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.26 is +0.04%.
Because both stocks hold a positive Earnings ESP, DE and ETN 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 >>