Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.

The earnings figure itself is key, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb even higher.

2 Stocks to Add to Your Watchlist

The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate. The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction.

The final step today is to look at a stock that meets our ESP qualifications. Carpenter Technology (CRS) earns a Zacks Rank #1 30 days from its next quarterly earnings release on October 24, 2024, and its Most Accurate Estimate comes in at $1.55 a share.

CRS has an Earnings ESP figure of 6.95%, which, as explained above, is calculated by taking the percentage difference between the $1.55 Most Accurate Estimate and the Zacks Consensus Estimate of $1.45.

CRS is one of just a large database of Basic Materials stocks with positive ESPs. Another solid-looking stock is Hecla Mining (HL).

Hecla Mining is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on November 4, 2024. HL's Most Accurate Estimate sits at $0.03 a share 41 days from its next earnings release.

Hecla Mining's Earnings ESP figure currently stands at 20% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.03.

CRS and HL's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

Find Stocks to Buy or Sell Before They're Reported

Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

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Carpenter Technology Corporation (CRS) : Free Stock Analysis Report