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These 2 Oils and Energy 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.
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 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 Marathon Petroleum?
The final step today is to look at a stock that meets our ESP qualifications. Marathon Petroleum (MPC - Free Report) earns a #3 (Hold) 29 days from its next quarterly earnings release on April 30, 2024, and its Most Accurate Estimate comes in at $4.06 a share.
By taking the percentage difference between the $4.06 Most Accurate Estimate and the $3.05 Zacks Consensus Estimate, Marathon Petroleum has an Earnings ESP of +33.14%. Investors should also know that MPC is one of a large group 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.
MPC is just one of a large group of Oils and Energy stocks with a positive ESP figure. Valero Energy (VLO - Free Report) is another qualifying stock you may want to consider.
Valero Energy is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on April 25, 2024. VLO's Most Accurate Estimate sits at $3.19 a share 24 days from its next earnings release.
Valero Energy's Earnings ESP figure currently stands at +4.09% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $3.06.
Because both stocks hold a positive Earnings ESP, MPC and VLO 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 Oils and Energy 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.
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 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 Marathon Petroleum?
The final step today is to look at a stock that meets our ESP qualifications. Marathon Petroleum (MPC - Free Report) earns a #3 (Hold) 29 days from its next quarterly earnings release on April 30, 2024, and its Most Accurate Estimate comes in at $4.06 a share.
By taking the percentage difference between the $4.06 Most Accurate Estimate and the $3.05 Zacks Consensus Estimate, Marathon Petroleum has an Earnings ESP of +33.14%. Investors should also know that MPC is one of a large group 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.
MPC is just one of a large group of Oils and Energy stocks with a positive ESP figure. Valero Energy (VLO - Free Report) is another qualifying stock you may want to consider.
Valero Energy is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on April 25, 2024. VLO's Most Accurate Estimate sits at $3.19 a share 24 days from its next earnings release.
Valero Energy's Earnings ESP figure currently stands at +4.09% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $3.06.
Because both stocks hold a positive Earnings ESP, MPC and VLO 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 >>