How to Find Strong Finance Stocks Slated for Positive Earnings Surprises
Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.
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 last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to look at a qualifying stock. First Citizens BancShares (FCNCA) holds a Zacks Rank #2 at the moment and its Most Accurate Estimate comes in at $50.21 a share six days away from its upcoming earnings release on October 26, 2023.
By taking the percentage difference between the $50.21 Most Accurate Estimate and the $48.35 Zacks Consensus Estimate, First Citizens BancShares has an Earnings ESP of 3.85%.
FCNCA is part of a big group of Finance stocks that boast a positive ESP, and investors may want to take a look at Progressive (PGR) as well.
Slated to report earnings on January 24, 2024, Progressive holds a #2 (Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $2.18 a share 96 days from its next quarterly update.
The Zacks Consensus Estimate for Progressive is $2.14, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 1.78%.
FCNCA and PGR'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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First Citizens BancShares, Inc. (FCNCA) : Free Stock Analysis Report
The Progressive Corporation (PGR) : Free Stock Analysis Report
