Yahoo Finance These 2 Basic Materials Stocks Could Beat Earnings: Why They Should Be on Your Radar
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. Dow Inc. (DOW) earns a Zacks Rank #3 29 days from its next quarterly earnings release on April 25, 2024, and its Most Accurate Estimate comes in at $0.48 a share.
Dow Inc.'s Earnings ESP sits at 2.53%, which, as explained above, is calculated by taking the percentage difference between the $0.48 Most Accurate Estimate and the Zacks Consensus Estimate of $0.47.
DOW is one of just a large database of Basic Materials stocks with positive ESPs. Another solid-looking stock is Nutrien (NTR).
Nutrien, which is readying to report earnings on May 8, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.52 a share, and NTR is 42 days out from its next earnings report.
The Zacks Consensus Estimate for Nutrien is $0.43, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 21.74%.
DOW and NTR'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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Dow Inc. (DOW) : Free Stock Analysis Report
Nutrien Ltd. (NTR) : Free Stock Analysis Report
