Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.
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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. Brunswick (BC) earns a Zacks Rank #3 16 days from its next quarterly earnings release on July 28, 2022, and its Most Accurate Estimate comes in at $2.75 a share.
By taking the percentage difference between the $2.75 Most Accurate Estimate and the $2.71 Zacks Consensus Estimate, Brunswick has an Earnings ESP of 1.39%.
BC is part of a big group of Consumer Discretionary stocks that boast a positive ESP, and investors may want to take a look at Las Vegas Sands (LVS) as well.
Slated to report earnings on July 20, 2022, Las Vegas Sands holds a #4 (Sell) ranking on the Zacks Rank, and it's Most Accurate Estimate is -$0.23 a share eight days from its next quarterly update.
The Zacks Consensus Estimate for Las Vegas Sands is -$0.23, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 0.44%.
BC and LVS' 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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Brunswick Corporation (BC) : Free Stock Analysis Report
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