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How to Boost Your Portfolio with Top Oils-Energy Stocks Set to Beat Earnings

Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.

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.

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The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to look at a qualifying stock. Petrobras (PBR) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at $0.98 a share 20 days away from its upcoming earnings release on May 9, 2024.

Petrobras' Earnings ESP sits at 11.36%, which, as explained above, is calculated by taking the percentage difference between the $0.98 Most Accurate Estimate and the Zacks Consensus Estimate of $0.88.

PBR is one of just a large database of Oils-Energy stocks with positive ESPs. Another solid-looking stock is Cheniere Energy (LNG).

Cheniere Energy, which is readying to report earnings on May 3, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $2.37 a share, and LNG is 14 days out from its next earnings report.

The Zacks Consensus Estimate for Cheniere Energy is $2.30, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 2.74%.

Because both stocks hold a positive Earnings ESP, PBR and LNG could potentially post earnings beats in their next reports.

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 >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Petroleo Brasileiro S.A.- Petrobras (PBR) : Free Stock Analysis Report

Cheniere Energy, Inc. (LNG) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research