Wall Street watches a company’s quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive 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. Micron (MU) earns a Zacks Rank #2 30 days from its next quarterly earnings release on June 26, 2024, and its Most Accurate Estimate comes in at $0.49 a share.
MU has an Earnings ESP figure of 5.22%, which, as explained above, is calculated by taking the percentage difference between the $0.49 Most Accurate Estimate and the Zacks Consensus Estimate of $0.47.
MU is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is Texas Instruments (TXN).
Slated to report earnings on July 23, 2024, Texas Instruments holds a #3 (Hold) ranking on the Zacks Rank, and it’s Most Accurate Estimate is $1.17 a share 57 days from its next quarterly update.
For Texas Instruments, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.16 is 1.19%.
MU and TXN’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 >>
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Micron Technology, Inc. (MU) : Free Stock Analysis Report
Texas Instruments Incorporated (TXN) : Free Stock Analysis Report
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