Want Better Returns? Don't Ignore These 2 Medical Stocks Set to Beat Earnings

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 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. Quest Diagnostics (DGX) earns a Zacks Rank #3 30 days from its next quarterly earnings release on April 20, 2023, and its Most Accurate Estimate comes in at $1.99 a share.

DGX has an Earnings ESP figure of 0.54%, which, as explained above, is calculated by taking the percentage difference between the $1.99 Most Accurate Estimate and the Zacks Consensus Estimate of $1.97.

DGX is part of a big group of Medical stocks that boast a positive ESP, and investors may want to take a look at Centene (CNC) as well.

Centene, which is readying to report earnings on April 25, 2023, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $2.72 a share, and CNC is 35 days out from its next earnings report.

For Centene, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.23 is 21.9%.

DGX and CNC'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

Quest Diagnostics Incorporated (DGX) : Free Stock Analysis Report

Centene Corporation (CNC) : Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research