How to Find Strong Consumer Discretionary Stocks Slated for Positive Earnings Surprises

Earnings are a crucial number to consider when looking at a company’s financial report. While Wall Street looks at various metrics and management’s input, the EPS figure helps cut through the noise.

Comparing a company’s performance to bottom line expectations is key for stock prices, particularly in the short term. Investors may want to take advantage of earnings surprises.

One way to predict potential earnings surprises is by using the Zacks Expected Surprise Prediction (ESP). This method focuses on the most recent analyst earnings revisions, which are often more accurate than estimates made weeks or months before the release date. By comparing the Most Accurate Estimate to the Zacks Consensus Estimate, the ESP figure is calculated.

Two stocks that meet the ESP qualifications are Wynn Resorts (WYNN) and Walt Disney (DIS). WYNN has an Earnings ESP of 2.4%, while DIS has an Earnings ESP of 2.5%. These positive ESP figures suggest that both stocks have a good chance of beating analyst expectations in their upcoming earnings reports.

Investors can use the Zacks Earnings ESP Filter to identify stocks with a high probability of positively or negatively surprising before their earnings reports, allowing for profitable trading during earnings season.

For more stock recommendations from Zacks Investment Research, you can download their report on the 7 Best Stocks for the Next 30 Days.