Will Southern Copper (SCCO) beat estimates again in its next earnings report?

Have you been looking for stocks that could be well positioned to maintain their strong performance streak in the upcoming report? Southern Copper (SCCO), which belongs to the Zacks Mining – Non Ferrous industry, is worth considering.

Looking at the last two reports, this miner has had a strong streak of beating earnings estimates. The company has exceeded estimates by an average of 34.03% over the last two quarters.

For the most recent reported quarter, Southern Copper posted earnings of $1.17 per share versus the Zacks Consensus Estimate of $0.80 per share, representing a surprise of 46.25%. For the prior quarter, it was expected to post earnings of $0.55 per share and it actually produced earnings of $0.67 per share, delivering a surprise of 21.82%.

Price and EPS surprise

Thanks in part to this history, Southern Copper has seen favorable earnings estimate revisions recently. In fact, the stock’s ESP (expected surprise) is positive, which is an excellent indicator of earnings growth, especially when combined with its 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.

Southern Copper currently has an ESP of +15.56%, which suggests analysts have recently become optimistic about the company’s earnings prospects. This positive Earnings ESP combined with the stock’s Zacks Rank #3 (Hold) indicates that another rally is likely just around the corner.

For the Earnings ESP metric, remember that a negative value reduces its predictive power; however, a negative earnings ESP does not mean a loss of earnings.

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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