Advertisement
UK markets open in 4 hours 21 minutes
  • NIKKEI 225

    39,596.29
    -144.15 (-0.36%)
     
  • HANG SENG

    16,593.03
    -144.09 (-0.86%)
     
  • CRUDE OIL

    82.58
    -0.14 (-0.17%)
     
  • GOLD FUTURES

    2,164.60
    +0.30 (+0.01%)
     
  • DOW

    38,790.43
    +75.66 (+0.20%)
     
  • Bitcoin GBP

    51,255.01
    -2,149.57 (-4.03%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • NASDAQ Composite

    16,103.45
    +130.27 (+0.82%)
     
  • UK FTSE All Share

    4,218.89
    -3.20 (-0.08%)
     

These 2 Retail-Wholesale 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 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.

ADVERTISEMENT

The final step today is to look at a stock that meets our ESP qualifications. MercadoLibre (MELI) earns a Zacks Rank #1 25 days from its next quarterly earnings release on February 28, 2023, and its Most Accurate Estimate comes in at $2.39 a share.

MELI has an Earnings ESP figure of 13.27%, which, as explained above, is calculated by taking the percentage difference between the $2.39 Most Accurate Estimate and the Zacks Consensus Estimate of $2.11.

MELI is one of just a large database of Retail-Wholesale stocks with positive ESPs. Another solid-looking stock is Darden Restaurants (DRI).

Darden Restaurants, which is readying to report earnings on March 23, 2023, sits at a Zacks Rank #2 (Buy) right now. It's Most Accurate Estimate is currently $2.22 a share, and DRI is 48 days out from its next earnings report.

The Zacks Consensus Estimate for Darden Restaurants is $2.20, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 0.51%.

MELI and DRI'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 >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

MercadoLibre, Inc. (MELI) : Free Stock Analysis Report

Darden Restaurants, Inc. (DRI) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research