Yahoo Finance How to Find Strong Consumer Discretionary Stocks Slated for Positive Earnings Surprises
Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
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. Boyd Gaming (BYD) earns a Zacks Rank #3 four days from its next quarterly earnings release on April 25, 2023, and its Most Accurate Estimate comes in at $1.56 a share.
Boyd Gaming's Earnings ESP sits at 4.06%, which, as explained above, is calculated by taking the percentage difference between the $1.56 Most Accurate Estimate and the Zacks Consensus Estimate of $1.50.
BYD is one of just a large database of Consumer Discretionary stocks with positive ESPs. Another solid-looking stock is Electronic Arts (EA).
Electronic Arts, which is readying to report earnings on May 9, 2023, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $1.34 a share, and EA is 18 days out from its next earnings report.
For Electronic Arts, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.32 is 1.32%.
BYD and EA'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 >>
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Boyd Gaming Corporation (BYD) : Free Stock Analysis Report
Electronic Arts Inc. (EA) : Free Stock Analysis Report
