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Want Better Returns? Don't Ignore These 2 Consumer Discretionary Stocks Set to Beat Earnings

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.

We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.

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.

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. BJ's Wholesale Club (BJ) earns a Zacks Rank #3 right now and its Most Accurate Estimate sits at $0.82 a share, just 29 days from its upcoming earnings release on August 18, 2022.

BJ has an Earnings ESP figure of 2.36%, which, as explained above, is calculated by taking the percentage difference between the $0.82 Most Accurate Estimate and the Zacks Consensus Estimate of $0.80.

BJ is just one of a large group of Consumer Discretionary stocks with a positive ESP figure. Boyd Gaming (BYD) is another qualifying stock you may want to consider.

Boyd Gaming is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on July 26, 2022. BYD's Most Accurate Estimate sits at $1.41 a share six days from its next earnings release.

For Boyd Gaming, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.39 is 1.62%.

BJ and BYD'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 >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
BJ's Wholesale Club Holdings, Inc. (BJ) : Free Stock Analysis Report
 
Boyd Gaming Corporation (BYD) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

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