Can Honeywell International Inc. (HON) maintain its earnings surprise streak?

Looking for a stock that has consistently beaten earnings estimates and could be well-positioned to continue its streak into its next quarterly report? Honeywell International Inc. (HON), a member of the Zacks Diversified Operations industry, could be a great candidate to consider.

Looking at the last two reports, this company has had a strong streak of beating earnings estimates. Over the last two quarters, the company has exceeded estimates by an average of 2.69%.

For the last reported quarter, Honeywell International Inc. posted earnings of $2.52 per share versus the Zacks Consensus Estimate of $2.49 per share, representing a surprise of 1.20%. The company was expected to post earnings of $2.16 per share for the previous quarter and actually delivered earnings of $2.25 per share, delivering a surprise of 4.17%.

In the case of Honeywell International Inc. estimates are trending upwards, thanks in part to a 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 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 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 that could potentially be more accurate than what they and other consensus participants had previously predicted.

Right now, Honeywell International Inc. has an Earnings ESP of +0.74%, 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 April 27, 2023.

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, though that’s not the only reason their shares rise. Additionally, some stocks may remain stable even if they ultimately fail to meet 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. Make sure you use our Earnings ESP Filter to discover the best stocks to buy or sell before they go live.

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

Honeywell International Inc. (HON): Free stock analysis report

To read this article on Zacks.com click here.

Zacks Investment Research