These 2 Consumer Staples Stocks Could Beat Earnings: Why They Should Be on Your Radar
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.
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, 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.
The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to look at a qualifying stock. Hershey (HSY) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at $2.74 a share 30 days away from its upcoming earnings release on April 25, 2024.
HSY has an Earnings ESP figure of 0.72%, which, as explained above, is calculated by taking the percentage difference between the $2.74 Most Accurate Estimate and the Zacks Consensus Estimate of $2.72.
HSY is just one of a large group of Consumer Staples stocks with a positive ESP figure. Dutch Bros (BROS) is another qualifying stock you may want to consider.
Dutch Bros, which is readying to report earnings on May 14, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.02 a share, and BROS is 49 days out from its next earnings report.
The Zacks Consensus Estimate for Dutch Bros is $0.02, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 7.7%.
HSY and BROS' 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 >>
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
Hershey Company (The) (HSY) : Free Stock Analysis Report
Dutch Bros Inc. (BROS) : Free Stock Analysis Report
