Want better returns? Don’t ignore these 2 retail and wholesale stocks that will beat earnings

Quarterly financial reports play a key role on Wall Street because they help investors see how a company is doing and what may happen in the near future. Of all the metrics and outcomes to consider, earnings are one of the most important.

We know that financial results are important, but a company’s performance relative to financial expectations can be even more important when it comes to share prices, especially in the short term. This means that investors may want to take advantage of earnings surprises.

2 stocks to add to your watchlist

The Zacks Earnings ESP is more formally known as the Expected Surprise Estimate, and is designed to gauge the latest analyst estimate revisions ahead of a company’s report. The idea is relatively intuitive because a newer forecast may 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.

The last thing we’ll do today, now that we have an idea about ESP and how powerful a tool it can be, is to take a look at qualifying stocks. Starbucks (SBUX) is currently sporting a Zacks Rank of #3 with a Most Accurate Estimate of $0.98 per share ahead of its November 2, 2023 earnings release.

SBUX has an Earnings ESP of 1.6%, which, as explained above, is calculated by taking the percentage difference between the Most Accurate Estimate of $0.98 and the Zacks Consensus Estimate of $0.96.

SBUX is one of the large databases of retail and wholesale stocks with positive ESPs. Another solid looking stock is Build a Teddy Bear (BBW).

Build-A-Bear, expected to report earnings on November 29, 2023, is currently sporting a Zacks Rank of #1 (Strong Buy). Its best-case estimate is currently at $0.62 per share, with 54 days until BBW’s next earnings report.

Build-A-Bear’s Earnings ESP is currently 8.53% after adjusting for the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate of $0.57.

Positive data from ESP SBUX and BBW tells us that both stocks have a good chance of beating analyst expectations in their next earnings report.

Find stocks you can buy or sell before they are reported

Use the Zacks Earnings ESP filter to view stocks most likely to experience positive or negative surprises to buy or sell before they are reported as seasonal earnings. Check here >>

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Starbucks Corporation (SBUX): Free Stock Analysis Report

Build-A-Bear Workshop, Inc. (BBW): Free Stock Analysis Report

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