Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
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. NextEra Energy (NEE) earns a Zacks Rank #3 16 days from its next quarterly earnings release on January 23, 2025, and its Most Accurate Estimate comes in at $0.53 a share.
By taking the percentage difference between the $0.53 Most Accurate Estimate and the $0.51 Zacks Consensus Estimate, NextEra Energy has an Earnings ESP of 4.43%.
NEE is part of a big group of Utilities stocks that boast a positive ESP, and investors may want to take a look at Entergy (ETR) as well.
Slated to report earnings on February 27, 2025, Entergy holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.65 a share 51 days from its next quarterly update.
Entergy's Earnings ESP figure currently stands at 1.09% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.64.
Because both stocks hold a positive Earnings ESP, NEE and ETR 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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NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
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