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These 2 Industrial Products 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.

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.

2 Stocks to Add to Your Watchlist

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 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.


The final step today is to look at a stock that meets our ESP qualifications. Caterpillar (CAT) earns a Zacks Rank #3 seven days from its next quarterly earnings release on April 25, 2024, and its Most Accurate Estimate comes in at $5.14 a share.

By taking the percentage difference between the $5.14 Most Accurate Estimate and the $5.12 Zacks Consensus Estimate, Caterpillar has an Earnings ESP of 0.38%.

CAT is one of just a large database of Industrial Products stocks with positive ESPs. Another solid-looking stock is A.O. Smith (AOS).

Slated to report earnings on April 25, 2024, A.O. Smith holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.01 a share seven days from its next quarterly update.

A.O. Smith's Earnings ESP figure currently stands at 1.87% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.99.

Because both stocks hold a positive Earnings ESP, CAT and AOS 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 >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Caterpillar Inc. (CAT) : Free Stock Analysis Report

A. O. Smith Corporation (AOS) : Free Stock Analysis Report

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Zacks Investment Research