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Why Investors Need to Take Advantage of These 2 Retail-Wholesale Stocks Now

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.

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.

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The final step today is to look at a stock that meets our ESP qualifications. Abercrombie & Fitch (ANF) earns a Zacks Rank #2 six days from its next quarterly earnings release on May 29, 2024, and its Most Accurate Estimate comes in at $1.70 a share.

Abercrombie & Fitch's Earnings ESP sits at 4.48%, which, as explained above, is calculated by taking the percentage difference between the $1.70 Most Accurate Estimate and the Zacks Consensus Estimate of $1.62.

ANF is part of a big group of Retail-Wholesale stocks that boast a positive ESP, and investors may want to take a look at Macy's (M) as well.

Macy's, which is readying to report earnings on August 27, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.25 a share, and M is 96 days out from its next earnings report.

The Zacks Consensus Estimate for Macy's is $0.24, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 4.17%.

Because both stocks hold a positive Earnings ESP, ANF and M 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

Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report

Macy's, Inc. (M) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research