Will Brunswick (BC) continue its streak of surprising financial results?

If you’re looking for a stock that has a solid history of beating earnings estimates and is well-positioned to continue the trend in its next quarterly report, you should consider Brunswick (BC). This company, which operates in the Zacks Leisure and Recreation Products industry, shows potential for another earnings beat.

This boating and sports equipment company has had a strong streak of beating earnings estimates, especially looking at the past two reports. The average surprise over the last two quarters was 8.43%.

In the most recently reported quarter, Brunswick posted earnings of $2.53 per share, while the Zacks Consensus Estimate was $2.33 per share, representing a surprise of 8.58%. In the previous quarter, the company was expected to report earnings of $1.33 per share, but it actually posted earnings of $1.44 per share, representing a surprise of 8.27%.

Price and EPS surprise

Given this earnings history, recent estimates for Brunswick are higher. In fact, the company’s Zacks Earnings ESP (expected surprise) is positive, which is a great sign of earnings growth, especially when you combine this metric with a nice Zacks Rank.

Our research shows that stocks with a combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better deliver a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; The Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea is that analysts revising their estimates just before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had previously predicted.

Right now, Braunschweig’s Earnings ESP is +1.39%, suggesting that analysts have become optimistic about the near-term earnings potential. When you combine this positive Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another uptick is likely just around the corner. The company’s next earnings report is expected to be released on July 28, 2022.

When the earnings ESP turns negative, investors should remember that this will reduce the predictive power of this indicator. However, a negative value does not indicate a lack of profits for the company.

Many companies end up beating consensus EPS estimates, but that may not be the only basis for their stock to grow. On the other hand, some stocks may hold their ground even if they miss consensus.

For this reason, it is very important to check a company’s earnings ESP before the quarterly release to increase your chances of success. Use our Earnings ESP filter to find the best stocks to buy or sell before they are reported.

Want the latest recommendations from Zacks Investment Research? Today you can download the top 7 stocks for the next 30 days. Click to get this free report

Brunswick Corporation (BC): Free Stock Analysis Report

To read this article on Zacks.com, click here.

Zacks Investment Research