Yahoo Finance How to Find Strong Finance Stocks Slated for Positive Earnings Surprises
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.
The earnings figure itself is key, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb even higher.
2 Stocks to Add to Your Watchlist
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. 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 final step today is to look at a stock that meets our ESP qualifications. Aflac (AFL) earns a Zacks Rank #2 two days from its next quarterly earnings release on February 1, 2023, and its Most Accurate Estimate comes in at $1.23 a share.
By taking the percentage difference between the $1.23 Most Accurate Estimate and the $1.21 Zacks Consensus Estimate, Aflac has an Earnings ESP of 1.29%.
AFL is just one of a large group of Finance stocks with a positive ESP figure. Capital One (COF) is another qualifying stock you may want to consider.
Capital One is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on April 25, 2023. COF's Most Accurate Estimate sits at $4.39 a share 85 days from its next earnings release.
Capital One's Earnings ESP figure currently stands at 2.69% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $4.28.
AFL and COF'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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Aflac Incorporated (AFL) : Free Stock Analysis Report
Capital One Financial Corporation (COF) : Free Stock Analysis Report
