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How to Boost Your Portfolio with Top Transportation Stocks Set to Beat Earnings
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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.
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.
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.
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.
Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.
Should You Consider JetBlue Airways?
The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to quickly look at a qualifying stock. JetBlue Airways (JBLU - Free Report) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at -$0.51 a share six days away from its upcoming earnings release on April 23, 2024.
JetBlue Airways' Earnings ESP sits at +4.55%, which, as explained above, is calculated by taking the percentage difference between the -$0.51 Most Accurate Estimate and the Zacks Consensus Estimate of -$0.53. JBLU is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
JBLU is just one of a large group of Transportation stocks with a positive ESP figure. American Airlines (AAL - Free Report) is another qualifying stock you may want to consider.
American Airlines is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on April 25, 2024. AAL's Most Accurate Estimate sits at -$0.26 a share eight days from its next earnings release.
American Airlines' Earnings ESP figure currently stands at +6.51% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of -$0.28.
JBLU and AAL's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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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How to Boost Your Portfolio with Top Transportation Stocks Set to Beat Earnings
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.
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.
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.
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.
Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.
Should You Consider JetBlue Airways?
The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to quickly look at a qualifying stock. JetBlue Airways (JBLU - Free Report) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at -$0.51 a share six days away from its upcoming earnings release on April 23, 2024.
JetBlue Airways' Earnings ESP sits at +4.55%, which, as explained above, is calculated by taking the percentage difference between the -$0.51 Most Accurate Estimate and the Zacks Consensus Estimate of -$0.53. JBLU is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
JBLU is just one of a large group of Transportation stocks with a positive ESP figure. American Airlines (AAL - Free Report) is another qualifying stock you may want to consider.
American Airlines is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on April 25, 2024. AAL's Most Accurate Estimate sits at -$0.26 a share eight days from its next earnings release.
American Airlines' Earnings ESP figure currently stands at +6.51% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of -$0.28.
JBLU and AAL's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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 >>