Earnings are arguably the most important single number on a company’s quarterly financial report. Wall Street clearly dives into all of the other metrics and management’s input, but the EPS figure helps cut through all the noise.
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 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. Eaton (ETN) earns a Zacks Rank #3 five days from its next quarterly earnings release on August 2, 2022, and its Most Accurate Estimate comes in at $1.83 a share.
By taking the percentage difference between the $1.83 Most Accurate Estimate and the $1.82 Zacks Consensus Estimate, Eaton has an Earnings ESP of 0.04%.
ETN is part of a big group of Industrial Products stocks that boast a positive ESP, and investors may want to take a look at Zebra Technologies (ZBRA) as well.
Slated to report earnings on August 2, 2022, Zebra Technologies holds a #3 (Hold) ranking on the Zacks Rank, and it’s Most Accurate Estimate is $4.28 a share five days from its next quarterly update.
Zebra Technologies’ Earnings ESP figure currently stands at 2.15% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $4.19.
ETN and ZBRA’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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Eaton Corporation, PLC (ETN) : Free Stock Analysis Report
Zebra Technologies Corporation (ZBRA) : Free Stock Analysis Report
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