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How to Find Strong Consumer Discretionary Stocks Slated for Positive Earnings Surprises

Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.

Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.

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.

The final step today is to look at a stock that meets our ESP qualifications. Deckers (DECK) earns a Zacks Rank #2 one day from its next quarterly earnings release on February 2, 2023, and its Most Accurate Estimate comes in at $9.73 a share.

By taking the percentage difference between the $9.73 Most Accurate Estimate and the $9.48 Zacks Consensus Estimate, Deckers has an Earnings ESP of 2.62%.

DECK is one of just a large database of Consumer Discretionary stocks with positive ESPs. Another solid-looking stock is Las Vegas Sands (LVS).

Las Vegas Sands, which is readying to report earnings on April 26, 2023, sits at a Zacks Rank #2 (Buy) right now. It's Most Accurate Estimate is currently $0.19 a share, and LVS is 84 days out from its next earnings report.

The Zacks Consensus Estimate for Las Vegas Sands is $0.15, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 27.91%.

DECK and LVS' 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

Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report

Las Vegas Sands Corp. (LVS) : Free Stock Analysis Report

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Zacks Investment Research