Zacks.com featured highlights NVIDIA, Stanley Black & Decker, Lamb Weston, General Electric and Dutch Bros
For Immediate Release
Chicago, IL – October 20, 2023 – Stocks in this week’s article are NVIDIA NVDA, Stanley Black & Decker SWK, Lamb Weston LW, General Electric GE and Dutch Bros BROS.
Looking for Earnings Beats? 5 Top Stocks to Play
It is not surprising that before an earnings season, every investor looks for stocks that can beat market expectations. This is because investors always try to position themselves ahead of time and look to tap stocks that are high-quality in nature.
In this regard, we ran a screener that yielded the likely winners on the earnings beat potential.
Why Is a Positive Earnings Surprise So Important?
Historically, stocks of companies with solid quarterly earnings (on a nominal basis) tank if they miss or merely meet market expectations. After all, a 20% earnings rise (though apparently looks good) doesn’t tell you if earnings growth has been exhibiting a decelerating trend.
Also, seasonal fluctuations come into play sometimes. If a company’s Q1 is seasonally weak and Q4 strong, then it is likely to report a sequential earnings decline. In such cases, growth rates are misleading while judging the true health of a company.
On the other hand, after much brainstorming and analysis of companies’ financials and initiatives, Wall Street analysts project earnings of companies. They in fact club their insights and a company’s guidance when deriving an earnings estimate.
Thus, outperforming that estimate is almost equivalent to beating the company’s own expectation as well as the market perception. And if the margin of earnings surprise is big, it typically drives the stock higher right after the release. Thus, more than anything else, an earnings surprise can push a stock higher.
How to Find Stocks that Can Beat?
Now, finding stocks that have the potential to beat on the bottom line may be investors’ dream but not an easy job. One way to do this is to look at the earnings surprise history of the company.
An impressive track in this regard generally acts as a catalyst in sending a stock higher. It indicates the company’s ability to surpass estimates. And investors generally believe that the company will apply the same secret sauce to execute yet another earning beat in its next release.
Here are five out of 15 stocks:
NVIDIA: The Zacks Rank #1 company is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. You can see the complete list of today’s Zacks #1 Rank stocks here.
The average earnings surprise of NVDA for the past four quarters is 9.79%.
Stanley Black & Decker: The Zacks Rank #1 company manufactures and provides tools (power and hand tools) and related accessories, engineered fastening systems, and several other items and services.
The average earnings surprise of SWK for the past four quarters is 47.18%.
Lamb Weston: The Zacks Rank #1 company is a leading global manufacturer, marketer and distributor of value-added frozen potato products, particularly French fries, and provides a range of appetizers.
The average earnings surprise of LW for the past four quarters is 46.16%.
General Electric: The Zacks Rank #2 is popular for its LEAP aircraft engines, heavy-duty gas turbines, Haliade-X and Cypress wind turbines, and healthcare solutions.
The average earnings surprise of GE for the past four quarters is 35.43%.
Dutch Bros: The Zacks Rank #2 company is an operator and franchisor of drive-thru shops, which focus on serving high quality, hand-crafted beverages with unparalleled speed and superior service.
The average earnings surprise of BROS for the past four quarters is 44.64%.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2168827/looking-for-earnings-beat-5-top-stocks-to-play
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.
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General Electric Company (GE) : Free Stock Analysis Report
Stanley Black & Decker, Inc. (SWK) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Lamb Weston (LW) : Free Stock Analysis Report
Dutch Bros Inc. (BROS) : Free Stock Analysis Report
