Can Blackstone Group (BX) maintain its earnings surprise streak?

If you’re looking for a stock that has a solid history of beating earnings estimates and is well-positioned to continue its trend in the next quarterly report, you should consider Blackstone Group (BX). This company, which operates in the Zacks Financial – Investment Management industry, shows potential for another earnings beat.

This investment manager has seen a nice streak of beating earnings estimates, especially considering the previous two reports. The average surprise for the last two quarters was 32.30%.

For the last quarter, Blackstone Group was expected to post earnings of $0.73 per share but instead the company reported earnings of $0.90 per share, delivering a surprise of 23.29%. For the previous quarter, the consensus estimate was $0.46 per share when the company actually delivered earnings of $0.65 per share, delivering a surprise of 41.30%.

Price and EPS surprise

With this earnings history in mind, recent estimates for Blackstone Group are higher. In fact, the company’s Zacks Earnings ESP (expected surprise) is positive, which is a great sign of earnings growth, especially when you combine this metric with a nice 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 almost 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 many 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, Blackstone Group’s Earnings ESP is +0.95%, 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 October 18, 2018.

In the case of the Earnings ESP indicator, it is important to remember that a negative value reduces its predictive power; however, a negative Earnings ESP value does not mean that profits have not been achieved.

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. Make sure you use our Earnings ESP Filter to discover the best stocks to buy or sell before they go live.

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