How to Find Strong Transportation Stocks Slated for Positive Earnings Surprises

·2-min read

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, 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. American Airlines (AAL) earns a Zacks Rank #2 22 days from its next quarterly earnings release on April 20, 2023, and its Most Accurate Estimate comes in at $0.09 a share.

AAL has an Earnings ESP figure of 592.31%, which, as explained above, is calculated by taking the percentage difference between the $0.09 Most Accurate Estimate and the Zacks Consensus Estimate of $0.01.

AAL is just one of a large group of Transportation stocks with a positive ESP figure. FedEx (FDX) is another qualifying stock you may want to consider.

FedEx, which is readying to report earnings on June 22, 2023, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $4.78 a share, and FDX is 85 days out from its next earnings report.

The Zacks Consensus Estimate for FedEx is $4.58, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 4.32%.

AAL and FDX'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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American Airlines Group Inc. (AAL) : Free Stock Analysis Report

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