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Looking for Stocks with Positive Earnings Momentum? Check Out These 2 Basic Materials Names

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·2 min read
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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.

The earnings figure itself is key, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb even higher.

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.

The final step today is to look at a stock that meets our ESP qualifications. Steel Dynamics (STLD) earns a Zacks Rank #3 28 days from its next quarterly earnings release on July 18, 2022, and its Most Accurate Estimate comes in at $5.87 a share.

STLD has an Earnings ESP figure of 4.54%, which, as explained above, is calculated by taking the percentage difference between the $5.87 Most Accurate Estimate and the Zacks Consensus Estimate of $5.62.

STLD is one of just a large database of Basic Materials stocks with positive ESPs. Another solid-looking stock is Eastman Chemical (EMN).

Eastman Chemical is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on August 1, 2022. EMN's Most Accurate Estimate sits at $2.77 a share 42 days from its next earnings release.

Eastman Chemical's Earnings ESP figure currently stands at 3.66% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.67.

STLD and EMN's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.

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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