Are you looking for stocks with positive earnings growth? Check out these 2 retail and wholesale names – May 23, 2024

Quarterly financial reports play a key role on Wall Street because they help investors see how a company is doing and what may happen in the near future. Of all the metrics and outcomes to consider, earnings are one of the most important.

Of course, the amount of earnings itself is crucial, but achieving the bottom line can sometimes be equally, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a strong hit can help the stock rise and vice versa.

Hunting down “earnings whispers” or companies that are willing to beat their quarterly earnings estimates is a fairly common practice. But that doesn’t make it easier. One proven way is to use the Zacks Earnings ESP tool.

Zacks ESP Earnings Explained

The Zacks Expected Surprise, or ESP, relies on the most recent analyst earnings revisions, which may be more accurate than estimates made weeks or even months ahead of the actual release date. The thinking is quite simple: analysts who provide earnings estimates closer to the report are likely to have more information.

The essence of the ESP model is to compare the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Estimate. The Zacks Rank is also included in the ESP metric to better help find companies that appear poised to beat their next earnings estimates, which will hopefully help drive the stock price higher.

In fact, when we combined a Zacks Rank of 3 or better (Hold) and a positive Earnings ESP, the stock delivered a positive surprise 70% of the time. Perhaps most importantly, according to our 10-year backtest, applying these parameters helped achieve an average annual return of 28.3%.

The majority of the shares, around 60%, are classified as #3 (Hold) and are expected to perform in line with broader market expectations. Stocks rated #2 (Buy) and #1 (Decide Buy), the top 15% and 5% of stocks respectively, are expected to outperform the market, with Strong Buy stocks outperforming any other position.

Should you consider Abercrombie & Fitch?

The final step today is to check out stocks that meet our ESP qualifications. Abercrombie & Fitch (ANF – Free Report) is ranked 2. (Buy) six days after its next quarterly earnings release on May 29, 2024, and its most accurate estimate is $1.70 per share.

Considering the percentage difference between the Most Accurate Estimate of $1.70 and the Zacks Consensus Estimate of $1.62, Abercrombie & Fitch has an Earnings ESP of +4.48%. Investors should also know that ANF belongs to a large group of companies with positive ESP. Use our Earnings ESP filter to find the best stocks to buy or sell before they report.

ANF ​​is one of the large databases of retail and wholesale stocks with positive ESPs. Another solid looking stock is Macy (M – Free Report) .

Macy’s, expected to report earnings on August 27, 2024, is currently sporting a Zacks Rank of #3 (Hold). Its best-case estimate is currently $0.25 per share, with M’s next earnings report 96 days away.

For Macy’s, the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate of $0.24 is +4.17%.

Since both stocks have positive earnings ESP, ANF and M could potentially post outperformance in their next reports.

Find stocks you can buy or sell before they are reported

Use the Zacks Earnings ESP filter to view stocks most likely to experience positive or negative surprises to buy or sell before they are reported as seasonal earnings. Check here >>

Research chief names ‘best choice to double down’

From thousands of stocks, five Zacks experts have selected their favorite stock to skyrocket 100% or more in the coming months. Of these five, research director Sheraz Mian picks the one who has the most explosive upside of all.

The company targets millennials and Gen Z, and generated nearly $1 billion in revenue last quarter alone. The recent pullback makes now the perfect time to jump to the next level. Of course, not all of our elite picks are winners, but this one has the potential to significantly outperform prior Zacks Rank stocks that have doubled compared to Nano-X Imaging, which is up 129.6% in just over 9 months.

Free: See our top products and 4 runners-up