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.
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.
The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate. The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction.
The final step today is to look at a stock that meets our ESP qualifications. BJ's Wholesale Club (BJ) earns a Zacks Rank #3 24 days from its next quarterly earnings release on March 6, 2025, and its Most Accurate Estimate comes in at $0.89 a share.
BJ has an Earnings ESP figure of 3.16%, which, as explained above, is calculated by taking the percentage difference between the $0.89 Most Accurate Estimate and the Zacks Consensus Estimate of $0.86.
BJ is part of a big group of Consumer Discretionary stocks that boast a positive ESP, and investors may want to take a look at Live Nation (LYV) as well.
Live Nation is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on February 20, 2025. LYV's Most Accurate Estimate sits at -$1.09 a share 10 days from its next earnings release.
For Live Nation, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of -$1.19 is 8.49%.
Because both stocks hold a positive Earnings ESP, BJ and LYV 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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BJ's Wholesale Club Holdings, Inc. (BJ) : Free Stock Analysis Report
Live Nation Entertainment, Inc. (LYV) : Free Stock Analysis Report
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