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Why Investors Need to Take Advantage of These 2 Oils-Energy Stocks Now

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.

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 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.

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The final step today is to look at a stock that meets our ESP qualifications. BP (BP) earns a Zacks Rank #3 25 days from its next quarterly earnings release on November 1, 2022, and its Most Accurate Estimate comes in at $2.17 a share.

By taking the percentage difference between the $2.17 Most Accurate Estimate and the $2.13 Zacks Consensus Estimate, BP has an Earnings ESP of 2%.

BP is one of just a large database of Oils-Energy stocks with positive ESPs. Another solid-looking stock is ConocoPhillips (COP).

ConocoPhillips, which is readying to report earnings on November 3, 2022, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $4.77 a share, and COP is 27 days out from its next earnings report.

ConocoPhillips' Earnings ESP figure currently stands at 18.74% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $4.02.

BP and COP'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
 
BP p.l.c. (BP) : Free Stock Analysis Report
 
ConocoPhillips (COP) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research