Will Timken (TKR) Beat Estimates Again in Its Next Earnings Report? – July 22, 2024

If you are looking for a stock that has a solid history of beating earnings estimates and is well-positioned to continue the trend into its next quarterly report, you should consider Timken (TKR – Free report.) This company, which operates in the Zacks Metal Products – Procurement and Fabrication industry, shows the potential for another earnings beat.

This manufacturer of bearings and drive gears has had a good streak of beating earnings estimates, especially looking at the two previous reports. The average surprise over the last two quarters was 14.69%.

For the last reported quarter, Timken showed earnings of $1.77 per share, compared to the Zacks consensus estimate of $1.50 per share, representing a surprise of 18%. In the previous quarter, the company was expected to show earnings of $1.23 per share but actually showed earnings of $1.37 per share, representing a surprise of 11.38%.

Price and EPS are surprising

In the case of Timken, estimates are higher, thanks in part to this history of earnings surprises. And when you look at the stock’s positive Zacks Earnings ESP (Expected Surprise Prediction), that’s a great indicator of future earnings beats, especially when paired 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 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.

Timken currently has an Earnings ESP of +1.49%, 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 July 31, 2024.

When the Earnings ESP is negative, investors should remember that this will reduce the predictive power of the indicator. However, a negative value is not an indicator of a lack of earnings for the stock.

Many companies end up beating consensus EPS estimates, although that’s not the only reason their stocks appreciate. In addition, some stocks can remain stable 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.