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Looking for Stocks with Positive Earnings Momentum? Check Out These 2 Industrial Products Names

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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, 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 final step today is to look at a stock that meets our ESP qualifications. Agco (AGCO) earns a Zacks Rank #3 zero days from its next quarterly earnings release on May 3, 2022, and its Most Accurate Estimate comes in at $1.90 a share.

By taking the percentage difference between the $1.90 Most Accurate Estimate and the $1.88 Zacks Consensus Estimate, Agco has an Earnings ESP of 0.93%.

AGCO is one of just a large database of Industrial Products stocks with positive ESPs. Another solid-looking stock is Eaton (ETN).

Eaton, which is readying to report earnings on May 3, 2022, sits at a Zacks Rank #4 (Sell) right now. It's Most Accurate Estimate is currently $1.62 a share, and ETN is zero days out from its next earnings report.

The Zacks Consensus Estimate for Eaton is $1.60, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 0.85%.

Because both stocks hold a positive Earnings ESP, AGCO and ETN 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 >>

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
AGCO Corporation (AGCO) : Free Stock Analysis Report
Eaton Corporation, PLC (ETN) : Free Stock Analysis Report
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Zacks Investment Research