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

·2 min read

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.

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 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 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. Signature Bank (SBNY) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at $5.06 a share one day away from its upcoming earnings release on July 19, 2022.

By taking the percentage difference between the $5.06 Most Accurate Estimate and the $5.05 Zacks Consensus Estimate, Signature Bank has an Earnings ESP of 0.21%.

SBNY is just one of a large group of Finance stocks with a positive ESP figure. Host Hotels (HST) is another qualifying stock you may want to consider.

Host Hotels is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on August 3, 2022. HST's Most Accurate Estimate sits at $0.52 a share 16 days from its next earnings release.

For Host Hotels, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.48 is 9.35%.

Because both stocks hold a positive Earnings ESP, SBNY and HST could potentially post earnings beats in their next reports.

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
Signature Bank (SBNY) : Free Stock Analysis Report
Host Hotels & Resorts, Inc. (HST) : Free Stock Analysis Report
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Zacks Investment Research