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Want Better Returns? Don't Ignore These 2 Oils-Energy Stocks Set to Beat Earnings

Zacks Equity Research
·2-min read

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.

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The final step today is to look at a stock that meets our ESP qualifications. Valero Energy (VLO) earns a Zacks Rank #1 nine days from its next quarterly earnings release on July 28, 2022, and its Most Accurate Estimate comes in at $9.67 a share.

Valero Energy's Earnings ESP sits at 10.22%, which, as explained above, is calculated by taking the percentage difference between the $9.67 Most Accurate Estimate and the Zacks Consensus Estimate of $8.78.

VLO is one of just a large database of Oils-Energy stocks with positive ESPs. Another solid-looking stock is Braskem (BAK).

Braskem is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on August 3, 2022. BAK's Most Accurate Estimate sits at $1.22 a share 15 days from its next earnings release.

Braskem's Earnings ESP figure currently stands at 21.5% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.

Because both stocks hold a positive Earnings ESP, VLO and BAK 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
 
Valero Energy Corporation (VLO) : Free Stock Analysis Report
 
Braskem S.A. (BAK) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research