Why Investors Need to Take Advantage of These 2 Consumer Discretionary Stocks Now
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 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. Cinemark Holdings (CNK) earns a Zacks Rank #3 right now and its Most Accurate Estimate sits at $0.48 a share, just two days from its upcoming earnings release on November 3, 2023.
By taking the percentage difference between the $0.48 Most Accurate Estimate and the $0.42 Zacks Consensus Estimate, Cinemark Holdings has an Earnings ESP of 12.44%.
CNK is just one of a large group of Consumer Discretionary stocks with a positive ESP figure. Royal Caribbean (RCL) is another qualifying stock you may want to consider.
Royal Caribbean, which is readying to report earnings on February 6, 2024, sits at a Zacks Rank #2 (Buy) right now. It's Most Accurate Estimate is currently $1.10 a share, and RCL is 97 days out from its next earnings report.
The Zacks Consensus Estimate for Royal Caribbean is $1.09, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 1.34%.
Because both stocks hold a positive Earnings ESP, CNK and RCL 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 >>
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Cinemark Holdings Inc (CNK) : Free Stock Analysis Report
Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report
