Yahoo Finance How to Find Strong Finance Stocks Slated for Positive Earnings Surprises
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.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.
2 Stocks to Add to Your Watchlist
The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information. With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure.
The final step today is to look at a stock that meets our ESP qualifications. Wells Fargo (WFC) earns a Zacks Rank #2 28 days from its next quarterly earnings release on July 12, 2024, and its Most Accurate Estimate comes in at $1.29 a share.
Wells Fargo's Earnings ESP sits at 2.75%, which, as explained above, is calculated by taking the percentage difference between the $1.29 Most Accurate Estimate and the Zacks Consensus Estimate of $1.25.
WFC is just one of a large group of Finance stocks with a positive ESP figure. Virtu Financial (VIRT) is another qualifying stock you may want to consider.
Virtu Financial, which is readying to report earnings on July 24, 2024, sits at a Zacks Rank #1 (Strong Buy) right now. It's Most Accurate Estimate is currently $0.59 a share, and VIRT is 40 days out from its next earnings report.
Virtu Financial's Earnings ESP figure currently stands at 0.28% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.59.
WFC and VIRT'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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Wells Fargo & Company (WFC) : Free Stock Analysis Report
Virtu Financial, Inc. (VIRT) : Free Stock Analysis Report
