tanker ship

Earnings are arguably the most important single number on a company’s quarterly financial report. Wall Street clearly dives into all of the other metrics and management’s input, but the EPS figure helps cut through all the noise.

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.

Now that we understand what the ESP is and how beneficial it can be, let’s dive into a stock that currently fits the bill. Scorpio Tankers (STNG) earns a Zacks Rank #1 right now and its Most Accurate Estimate sits at $3.89 a share, just 30 days from its upcoming earnings release on November 10, 2022.

finviz dynamic chart for STNG

By taking the percentage difference between the $3.89 Most Accurate Estimate and the $3.61 Zacks Consensus Estimate, Scorpio Tankers has an Earnings ESP of 7.83%.

STNG is part of a big group of Transportation stocks that boast a positive ESP, and investors may want to take a look at Canadian Pacific (CP) as well.

finviz dynamic chart for CP

Canadian Pacific is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on October 26, 2022. CP’s Most Accurate Estimate sits at $0.82 a share 15 days from its next earnings release.

For Canadian Pacific, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.79 is 3.81%.

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

Photo by Chris Pagan on Unsplash

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