These 2 Finance Stocks Could Beat Earnings: Why They Should Be on Your Radar
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 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.
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Arch Capital Group (ACGL) earns a Zacks Rank #3 right now and its Most Accurate Estimate sits at $1.51 a share, just 29 days from its upcoming earnings release on October 25, 2023.
Arch Capital Group's Earnings ESP sits at 20%, which, as explained above, is calculated by taking the percentage difference between the $1.51 Most Accurate Estimate and the Zacks Consensus Estimate of $1.26.
ACGL is just one of a large group of Finance stocks with a positive ESP figure. Zions (ZION) is another qualifying stock you may want to consider.
Slated to report earnings on October 18, 2023, Zions holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.10 a share 22 days from its next quarterly update.
Zions' Earnings ESP figure currently stands at 0.76% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.09.
Because both stocks hold a positive Earnings ESP, ACGL and ZION 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 >>
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Arch Capital Group Ltd. (ACGL) : Free Stock Analysis Report
Zions Bancorporation, N.A. (ZION) : Free Stock Analysis Report
