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These 2 Retail and Wholesale 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.
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, 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 #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 Walmart?
The final step today is to look at a stock that meets our ESP qualifications. Walmart (WMT - Free Report) earns a #3 (Hold) nine days from its next quarterly earnings release on May 16, 2024, and its Most Accurate Estimate comes in at $0.53 a share.
By taking the percentage difference between the $0.53 Most Accurate Estimate and the $0.52 Zacks Consensus Estimate, Walmart has an Earnings ESP of +1.65%. Investors should also know that WMT 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.
WMT is part of a big group of Retail and Wholesale stocks that boast a positive ESP, and investors may want to take a look at Walgreens Boots Alliance (WBA - Free Report) as well.
Slated to report earnings on June 25, 2024, Walgreens Boots Alliance holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.70 a share 49 days from its next quarterly update.
The Zacks Consensus Estimate for Walgreens Boots Alliance is $0.68, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +2.75%.
WMT and WBA'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 Retail and Wholesale 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.
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, 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 #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 Walmart?
The final step today is to look at a stock that meets our ESP qualifications. Walmart (WMT - Free Report) earns a #3 (Hold) nine days from its next quarterly earnings release on May 16, 2024, and its Most Accurate Estimate comes in at $0.53 a share.
By taking the percentage difference between the $0.53 Most Accurate Estimate and the $0.52 Zacks Consensus Estimate, Walmart has an Earnings ESP of +1.65%. Investors should also know that WMT 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.
WMT is part of a big group of Retail and Wholesale stocks that boast a positive ESP, and investors may want to take a look at Walgreens Boots Alliance (WBA - Free Report) as well.
Slated to report earnings on June 25, 2024, Walgreens Boots Alliance holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.70 a share 49 days from its next quarterly update.
The Zacks Consensus Estimate for Walgreens Boots Alliance is $0.68, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +2.75%.
WMT and WBA'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 >>