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.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.
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 final step today is to look at a stock that meets our ESP qualifications. Carnival (CCL) earns a Zacks Rank #3 30 days from its next quarterly earnings release on March 26, 2025, and its Most Accurate Estimate comes in at $0.04 a share.
CCL has an Earnings ESP figure of 70.81%, which, as explained above, is calculated by taking the percentage difference between the $0.04 Most Accurate Estimate and the Zacks Consensus Estimate of $0.02.
CCL is part of a big group of Consumer Discretionary stocks that boast a positive ESP, and investors may want to take a look at Hasbro (HAS) as well.
Hasbro is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on April 23, 2025. HAS' Most Accurate Estimate sits at $0.76 a share 58 days from its next earnings release.
Hasbro's Earnings ESP figure currently stands at 2.03% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.74.
Because both stocks hold a positive Earnings ESP, CCL and HAS could potentially post earnings beats in their next reports.
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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Carnival Corporation (CCL) : Free Stock Analysis Report
Hasbro, Inc. (HAS) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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