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Want Better Returns? Don't Ignore These 2 Basic Materials Stocks Set to Beat Earnings

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.

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.

The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to look at a qualifying stock. Air Products and Chemicals (APD) holds a Zacks Rank #2 at the moment and its Most Accurate Estimate comes in at $2.80 a share two days away from its upcoming earnings release on February 2, 2023.

By taking the percentage difference between the $2.80 Most Accurate Estimate and the $2.73 Zacks Consensus Estimate, Air Products and Chemicals has an Earnings ESP of 2.67%.

APD is just one of a large group of Basic Materials stocks with a positive ESP figure. Allegheny Technologies (ATI) is another qualifying stock you may want to consider.

Allegheny Technologies is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on February 2, 2023. ATI's Most Accurate Estimate sits at $0.53 a share two days from its next earnings release.

Allegheny Technologies' Earnings ESP figure currently stands at 0.76% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.53.

APD and ATI's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

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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Air Products and Chemicals, Inc. (APD) : Free Stock Analysis Report

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