Yahoo Finance These 2 Consumer Discretionary Stocks Could Beat Earnings: Why They Should Be on Your Radar
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 is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks 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. Royal Caribbean (RCL) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at $1.37 a share two days away from its upcoming earnings release on April 25, 2024.
Royal Caribbean's Earnings ESP sits at 5.3%, which, as explained above, is calculated by taking the percentage difference between the $1.37 Most Accurate Estimate and the Zacks Consensus Estimate of $1.30.
RCL is one of just a large database of Consumer Discretionary stocks with positive ESPs. Another solid-looking stock is Crocs (CROX).
Crocs, which is readying to report earnings on May 7, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $2.33 a share, and CROX is 14 days out from its next earnings report.
Crocs' Earnings ESP figure currently stands at 4.42% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.23.
Because both stocks hold a positive Earnings ESP, RCL and CROX 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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Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report
Crocs, Inc. (CROX) : Free Stock Analysis Report
