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.
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.
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. Norwegian Cruise Line (NCLH) earns a Zacks Rank #3 26 days from its next quarterly earnings release on May 7, 2025, and its Most Accurate Estimate comes in at $0.10 a share.
Norwegian Cruise Line's Earnings ESP sits at 4.11%, which, as explained above, is calculated by taking the percentage difference between the $0.10 Most Accurate Estimate and the Zacks Consensus Estimate of $0.09.
NCLH is just one of a large group of Consumer Discretionary stocks with a positive ESP figure. Walt Disney (DIS) is another qualifying stock you may want to consider.
Walt Disney, which is readying to report earnings on May 7, 2025, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $1.21 a share, and DIS is 26 days out from its next earnings report.
Walt Disney's Earnings ESP figure currently stands at 1.78% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.19.
NCLH and DIS' positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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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Norwegian Cruise Line Holdings Ltd. (NCLH) : Free Stock Analysis Report
The Walt Disney Company (DIS) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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