Investors are always looking for stocks that are poised to beat at earnings season and Applied Materials, Inc. (AMAT - Free Report) may be one such company. The firm has earnings coming up pretty soon, and events are shaping up quite nicely for their report.
That is because Applied Materialsis seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates right before earnings — with the most up-to-date information possible — is a pretty good indicator of some favorable trends underneath the surface for AMAT in this report.
In fact, the Most Accurate Estimate for the current quarter is currently at 95 cents per share for AMAT, compared to a broader Zacks Consensus Estimate of 92 cents per share. This suggests that analysts have very recently bumped up their estimates for AMAT, giving the stock a Zacks Earnings ESP of +2.89% heading into earnings season.
Why is this Important?
A positive reading for the Zacks Earnings ESP has proven to be very powerful in producing both positive surprises, and outperforming the market. Our recent 10-year backtest shows that stocks that have a positive Earnings ESP and a Zacks Rank #3 (Hold) or better show a positive surprise nearly 70% of the time, and have returned over 28% on average in annual returns (see more Top Earnings ESP stocks here).
Given that AMAT has a Zacks Rank #1 (Strong Buy) and an ESP in positive territory, investors might want to consider this stock ahead of earnings. You can see the complete list of today’s Zacks #1 Rank stocks here.
Clearly, recent earnings estimate revisions suggest that good things are ahead for Applied Materials, and that a beat might be in the cards for the upcoming report.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>