How to Boost Your Portfolio with Top Utilities Stocks Set to Beat Earnings
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 Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information. With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the 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. NRG Energy (NRG) earns a Zacks Rank #3 right now and its Most Accurate Estimate sits at $1.93 a share, just 20 days from its upcoming earnings release on November 6, 2023.
By taking the percentage difference between the $1.93 Most Accurate Estimate and the $1.79 Zacks Consensus Estimate, NRG Energy has an Earnings ESP of 8.12%.
NRG is part of a big group of Utilities stocks that boast a positive ESP, and investors may want to take a look at Southern Co. (SO) as well.
Southern Co. is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on November 2, 2023. SO's Most Accurate Estimate sits at $1.32 a share 16 days from its next earnings release.
The Zacks Consensus Estimate for Southern Co. is $1.31, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 0.61%.
Because both stocks hold a positive Earnings ESP, NRG and SO 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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NRG Energy, Inc. (NRG) : Free Stock Analysis Report
Southern Company (The) (SO) : Free Stock Analysis Report
