Can Murphy Oil (MUR) maintain its earnings surprise streak?

Have you been looking for stocks that could be well positioned to maintain their strong performance streak in the upcoming report? Murphy Oil (MUR), which belongs to the Zacks Oil and Gas – Exploration and Production – United States industry, is worth considering.

This oil and gas producer has a proven track record of achieving top earnings estimates, especially considering its two previous reports. The company boasts an average surprise for the last two quarters of 29.82%.

For the most recent reported quarter, Murphy Oil’s earnings of $1.93 per share compared to the Zacks Consensus Estimate of $1.42 per share, representing a surprise of 35.92%. For the previous quarter, it was expected that the company would post earnings of $0.59 per share and it actually produced earnings of $0.73 per share, delivering a surprise of 23.73%.

Price and EPS surprise

For Murphy Oil, estimates are trending upwards, thanks in part to its history of surprising results. And if you look at the positive Zacks Earnings ESP (Expected Surprise Estimate), it is a great indicator of future earnings growth, especially when combined with the solid Zacks Rank.

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

The Zacks Earnings ESP compares the Most Accurate Estimates to the Zacks Consensus Estimates for the quarter; The Most Accurate Estimate is the Zacks Consensus version, which is defined in terms of change. The idea is that analysts reviewing their estimates just before an earnings release have the latest information, which could potentially be more accurate than what they and other consensus participants had previously predicted.

Murphy Oil currently has an Earnings ESP of +0.79%, which suggests analysts are becoming optimistic about its near-term earnings potential. When you combine this positive Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another rally is likely just around the corner. The company’s next earnings report is expected to be released on November 3, 2022.

However, investors should remember that a negative earnings ESP reading does not mean a loss of earnings, but a negative value reduces the predictive power of the metric.

Many companies end up beating consensus EPS estimates, though that’s not the only reason their shares rise. Additionally, some stocks may remain stable even if they fall short of consensus estimates.

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

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