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Want Better Returns? Don't Ignore These 2 Consumer Staples Stocks Set to Beat Earnings

Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.

Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.

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 final step today is to look at a stock that meets our ESP qualifications. Coty (COTY) earns a Zacks Rank #2 four days from its next quarterly earnings release on May 9, 2023, and its Most Accurate Estimate comes in at $0.07 a share.

COTY has an Earnings ESP figure of 60.97%, which, as explained above, is calculated by taking the percentage difference between the $0.07 Most Accurate Estimate and the Zacks Consensus Estimate of $0.05.

COTY is one of just a large database of Consumer Staples stocks with positive ESPs. Another solid-looking stock is Colgate-Palmolive (CL).

Colgate-Palmolive, which is readying to report earnings on August 4, 2023, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.75 a share, and CL is 91 days out from its next earnings report.

For Colgate-Palmolive, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.74 is 0.3%.

Because both stocks hold a positive Earnings ESP, COTY and CL 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

Coty (COTY) : Free Stock Analysis Report

Colgate-Palmolive Company (CL) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research