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Want Better Returns? Don't Ignore These 2 Oils-Energy Stocks Set to Beat Earnings

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.

We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these 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 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. Cheniere Energy (LNG) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at $2.37 a share 25 days away from its upcoming earnings release on May 3, 2024.

By taking the percentage difference between the $2.37 Most Accurate Estimate and the $2.30 Zacks Consensus Estimate, Cheniere Energy has an Earnings ESP of 2.74%.

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

Patterson-UTI is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on April 24, 2024. PTEN's Most Accurate Estimate sits at $0.13 a share 16 days from its next earnings release.

For Patterson-UTI, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.13 is 1.74%.

LNG and PTEN'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 >>

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

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

Patterson-UTI Energy, Inc. (PTEN) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research