How to Find Strong Finance Stocks Slated for Positive Earnings Surprises
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 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.
The final step today is to look at a stock that meets our ESP qualifications. Bank of America (BAC) earns a Zacks Rank #3 25 days from its next quarterly earnings release on April 18, 2023, and its Most Accurate Estimate comes in at $0.86 a share.
BAC has an Earnings ESP figure of 5.82%, which, as explained above, is calculated by taking the percentage difference between the $0.86 Most Accurate Estimate and the Zacks Consensus Estimate of $0.81.
BAC is just one of a large group of Finance stocks with a positive ESP figure. Ladder Capital (LADR) is another qualifying stock you may want to consider.
Ladder Capital, which is readying to report earnings on April 27, 2023, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.30 a share, and LADR is 34 days out from its next earnings report.
Ladder Capital's Earnings ESP figure currently stands at 5.26% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.29.
BAC and LADR's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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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Bank of America Corporation (BAC) : Free Stock Analysis Report
Ladder Capital Corp (LADR) : Free Stock Analysis Report
