These 2 Finance Stocks Could Beat Earnings: Why They Should Be on Your Radar
Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.
The earnings figure itself is key, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb even higher.
2 Stocks to Add to Your Watchlist
The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information. With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the 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. Arch Capital Group (ACGL) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at $2.22 a share 22 days away from its upcoming earnings release on July 30, 2024.
Arch Capital Group's Earnings ESP sits at 2.64%, which, as explained above, is calculated by taking the percentage difference between the $2.22 Most Accurate Estimate and the Zacks Consensus Estimate of $2.16.
ACGL is one of just a large database of Finance stocks with positive ESPs. Another solid-looking stock is CME Group (CME).
CME Group, which is readying to report earnings on July 24, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $2.53 a share, and CME is 16 days out from its next earnings report.
For CME Group, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.49 is 1.5%.
ACGL and CME's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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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Arch Capital Group Ltd. (ACGL) : Free Stock Analysis Report
CME Group Inc. (CME) : Free Stock Analysis Report