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 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.
ADVERTISEMENT
The final step today is to look at a stock that meets our ESP qualifications. Enterprise Products Partners (EPD) earns a Zacks Rank #3 27 days from its next quarterly earnings release on August 6, 2024, and its Most Accurate Estimate comes in at $0.69 a share.
Enterprise Products Partners’ Earnings ESP sits at 5.34%, which, as explained above, is calculated by taking the percentage difference between the $0.69 Most Accurate Estimate and the Zacks Consensus Estimate of $0.66.
EPD is one of just a large database of Oils-Energy stocks with positive ESPs. Another solid-looking stock is TC Energy (TRP).
TC Energy is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on July 25, 2024. TRP’s Most Accurate Estimate sits at $0.65 a share 15 days from its next earnings release.
For TC Energy, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.63 is 3.18%.
Because both stocks hold a positive Earnings ESP, EPD and TRP could potentially post earnings beats in their next reports.
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
Enterprise Products Partners L.P. (EPD) : Free Stock Analysis Report
TC Energy Corporation (TRP) : Free Stock Analysis Report