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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.

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 final step today is to look at a stock that meets our ESP qualifications. JB Hunt (JBHT) earns a Zacks Rank #3 30 days from its next quarterly earnings release on October 21, 2022, and its Most Accurate Estimate comes in at $2.54 a share.

finviz dynamic chart for JBHT

JBHT has an Earnings ESP figure of 4.39%, which, as explained above, is calculated by taking the percentage difference between the $2.54 Most Accurate Estimate and the Zacks Consensus Estimate of $2.43.

JBHT is just one of a large group of Transportation stocks with a positive ESP figure. United Airlines (UAL) is another qualifying stock you may want to consider.

finviz dynamic chart for UAL

United Airlines is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on October 18, 2022. UAL’s Most Accurate Estimate sits at $2.33 a share 27 days from its next earnings release.

For United Airlines, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.15 is 8.07%.

JBHT and UAL’s positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

Photo by Julius Silver

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