How to Find Strong Retail-Wholesale Stocks Slated for Positive Earnings Surprises
Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
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.
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.
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Chipotle Mexican Grill (CMG) earns a Zacks Rank #2 right now and its Most Accurate Estimate sits at $9.29 a share, just five days from its upcoming earnings release on October 25, 2022.
By taking the percentage difference between the $9.29 Most Accurate Estimate and the $9.09 Zacks Consensus Estimate, Chipotle Mexican Grill has an Earnings ESP of 2.11%.
CMG is just one of a large group of Retail-Wholesale stocks with a positive ESP figure. Costco (COST) is another qualifying stock you may want to consider.
Costco is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on December 8, 2022. COST's Most Accurate Estimate sits at $3.17 a share 49 days from its next earnings release.
Costco's Earnings ESP figure currently stands at 0.53% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $3.15.
CMG and COST'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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Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
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