How to Find Strong Industrial Stocks That Are Expected to Deliver Positive Earnings Surprises

Wall Street closely watches the company’s quarterly reports to best understand its recent performance and what to expect in the future. Of course, one number often stands out from the rest: earnings.

Both life and the stock market are about expectations, and rising above expectations is often rewarded, while falling can have negative consequences. Investors may want to try to achieve higher returns by finding positive surprises in earnings.

2 stocks worth adding to your watchlist

The Zacks Expected Surprise Prediction, or ESP, works by locking in on the latest analyst earnings revisions, as they can be more accurate than estimates from weeks or even months prior to the actual release date. The thinking is pretty simple: analysts who provide earnings estimates closer to the report likely have more information. With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (which is the most recent) to the overall Zacks Consensus Estimate. The difference in percentage points provides the ESP.

The final step today will be to look at stocks that meet our ESP requirements. Johnson Controls (JCI) is assigned a Zacks Rank #3 30 days from its next quarterly earnings release date which is August 7, 2024, and its Most Accurate Estimate is $1.10 per share.

Johnson Controls’ Earnings ESP is 1.55%, which, as explained above, is calculated by taking into account the percentage difference between the Most Accurate Estimate of $1.10 and the Zacks Consensus Estimate of $1.08.

JCI is one of many Industrial Products stocks with positive ESPs. Another solid looking stock is Hub Bell (HUBB).

Hubbell, which is gearing up to report earnings on July 23, 2024, is currently sporting a Zacks Rank #2 (Buy). Its Most Accurate Estimate currently stands at $4.24 per share, with HUBB 15 days away from its next earnings report.

The Zacks Consensus Estimate for Hubbell is $4.23, and when we take the percentage difference between that number and its Most Accurate Estimate, we get an Earnings ESP of 0.27%.

Since both stocks have a positive Earnings ESP, JCI and HUBB could potentially post higher-than-expected earnings in their next reports.

Find stocks to buy or sell before they’re reported

Use the Zacks Earnings ESP filter to view stocks with the highest probability of producing a positive or negative buying or selling surprise before they report for profitable trading during earnings season. Check here >>

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Johnson Controls International plc (JCI): Free Stock Analysis Report

Hubbell Inc (HUBB): Free Stock Analysis Report

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