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These 2 Consumer Staples 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 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. Altria (MO) earns a Zacks Rank #3 six days from its next quarterly earnings release on April 25, 2024, and its Most Accurate Estimate comes in at $1.17 a share.

Altria's Earnings ESP sits at 1.53%, which, as explained above, is calculated by taking the percentage difference between the $1.17 Most Accurate Estimate and the Zacks Consensus Estimate of $1.15.

MO is one of just a large database of Consumer Staples stocks with positive ESPs. Another solid-looking stock is Philip Morris (PM).

Slated to report earnings on April 23, 2024, Philip Morris holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.46 a share four days from its next quarterly update.

The Zacks Consensus Estimate for Philip Morris is $1.41, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 3.75%.

MO and PM'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 >>

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

Altria Group, Inc. (MO) : Free Stock Analysis Report

Philip Morris International Inc. (PM) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research