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These 2 Medical Stocks Could Beat Earnings: Why They Should Be on Your Radar

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.

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. HCA Healthcare (HCA) earns a Zacks Rank #2 13 days from its next quarterly earnings release on July 23, 2024, and its Most Accurate Estimate comes in at $5.32 a share.

HCA Healthcare's Earnings ESP sits at 7.1%, which, as explained above, is calculated by taking the percentage difference between the $5.32 Most Accurate Estimate and the Zacks Consensus Estimate of $4.97.

HCA is one of just a large database of Medical stocks with positive ESPs. Another solid-looking stock is Cigna (CI).

Cigna is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on August 1, 2024. CI's Most Accurate Estimate sits at $6.48 a share 22 days from its next earnings release.

For Cigna, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $6.42 is 0.94%.

Because both stocks hold a positive Earnings ESP, HCA and CI 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

HCA Healthcare, Inc. (HCA) : Free Stock Analysis Report

Cigna Group (CI) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research