How to Boost Your Portfolio with Top Finance Stocks Set to Beat Earnings
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.
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, 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. American Tower (AMT) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at $2.37 a share nine days away from its upcoming earnings release on October 26, 2023.
By taking the percentage difference between the $2.37 Most Accurate Estimate and the $2.35 Zacks Consensus Estimate, American Tower has an Earnings ESP of 0.59%.
AMT is part of a big group of Finance stocks that boast a positive ESP, and investors may want to take a look at AvalonBay Communities (AVB) as well.
AvalonBay Communities, which is readying to report earnings on October 25, 2023, sits at a Zacks Rank #2 (Buy) right now. It's Most Accurate Estimate is currently $2.66 a share, and AVB is eight days out from its next earnings report.
For AvalonBay Communities, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.64 is 0.76%.
Because both stocks hold a positive Earnings ESP, AMT and AVB 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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American Tower Corporation (AMT) : Free Stock Analysis Report
AvalonBay Communities, Inc. (AVB) : Free Stock Analysis Report
