Yahoo Finance How to Find Strong Finance Stocks Slated for Positive Earnings Surprises
Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.
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.
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.
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Equinix (EQIX) earns a Zacks Rank #2 right now and its Most Accurate Estimate sits at $8.71 a share, just five days from its upcoming earnings release on May 1, 2024.
Equinix's Earnings ESP sits at 1.49%, which, as explained above, is calculated by taking the percentage difference between the $8.71 Most Accurate Estimate and the Zacks Consensus Estimate of $8.58.
EQIX is one of just a large database of Finance stocks with positive ESPs. Another solid-looking stock is Agree Realty (ADC).
Slated to report earnings on August 6, 2024, Agree Realty holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.02 a share 102 days from its next quarterly update.
The Zacks Consensus Estimate for Agree Realty is $1.02, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 0.33%.
EQIX and ADC'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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Equinix, Inc. (EQIX) : Free Stock Analysis Report
Agree Realty Corporation (ADC) : Free Stock Analysis Report
