Stock prices in the long run are often influenced by earnings and interest rates. While investors cannot control interest rates, they can pay attention to a company’s earnings results each quarter. Meeting or exceeding expectations can lead to positive outcomes, while falling short can have negative consequences.
One way investors can potentially capture stronger returns is by looking for positive earnings surprises. The Zacks Expected Surprise Prediction (ESP) focuses on the most up-to-date analyst earnings revisions, which are often more accurate than estimates made weeks or months before the actual release date. By comparing the Most Accurate Estimate with the Zacks Consensus Estimate, investors can calculate the ESP figure.
Currently, Comcast (CMCSA) and Carnival (CCL) are two stocks worth watching. Comcast has an Earnings ESP of 0.46%, while Carnival has an Earnings ESP of 0.56%. Both stocks have positive Earnings ESP, indicating they may potentially exceed earnings expectations in their upcoming reports.
Investors can use the Zacks Earnings ESP Filter to identify stocks with the highest probability of surprising positively or negatively before their earnings reports. This tool can help investors make informed decisions for profitable trading during earnings season.