Will Amgen (AMGN) Beat Estimates Again in Its Next Earnings Report?

Have you been looking for a stock that might be well-positioned to continue its earnings streak in its upcoming report? Consider Amgen (AMGN), which belongs to the Zacks Medical – Biomedical and Genetics industry.

The world’s largest biotech drugmaker has a well-established reputation for beating earnings estimates, especially when looking at the past two reports. The company boasts an average earnings surprise of 3.20% over the past two quarters.

Amgen was expected to post earnings of $3.76 per share for the last quarter but instead came out with earnings of $3.96 per share, delivering a surprise of 5.32%. For the previous quarter, the consensus estimate was $4.66 per share when in reality earnings were $4.71 per share, delivering a surprise of 1.07%.

Price and EPS are surprising

Given this earnings history, Amgen’s latest estimates have been getting higher. In fact, the company’s Zacks Earnings ESP (Expected Surprise Prediction) is positive, which is a great sign of an earnings beat, especially when you combine this metric with its strong Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better deliver a positive surprise almost 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat consensus estimates could be as many 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 revision of the Zacks Consensus definition that is related to revision. 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 other contributors to the consensus had previously predicted.

Amgen currently has an Earnings ESP of +2.25%, suggesting that analysts have recently become bullish on the company’s earnings prospects. This positive Earnings ESP, combined with the stock’s Zacks Rank #3 (Hold), indicates that another beat is likely just around the corner. We expect the company’s next earnings report to be released on August 6, 2024.

However, investors should remember that a negative Earnings ESP reading does not indicate a failure to achieve profits, but a negative value reduces the predictive power of this indicator.

Many companies end up beating consensus EPS estimates, but that may not be the only basis for their stock growth. On the other hand, some stocks can maintain their position even if they end up missing consensus estimates.

For this reason, it is very important to check a company’s Earnings ESP before its quarterly release to increase your chances of success. Make sure you use our Earnings ESP Filter to discover the best stocks to buy or sell before they are released.

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