These 2 Transportation Stocks Could Beat Earnings: Why They Should Be on Your Radar

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. The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier. The Zacks Earnings ESP, Explained The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information. 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 Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price. Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest. Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, or the top 15% and top 5% of stocks, respectively, should outperform the market. Strong Buy stocks should outperform more than any other rank. Should You Consider Alaska Air Group? The final step today is to look at a stock that meets our ESP qualifications. Alaska Air Group (ALK) earns a #3 (Hold) 30 days from its next quarterly earnings release on October 17, 2024, and its Most Accurate Estimate comes in at $1.98 a share. Alaska Air Group's Earnings ESP sits at +14.84%, which, as explained above, is calculated by taking the percentage difference between the $1.98 Most Accurate Estimate and the Zacks Consensus Estimate of $1.72. ALK is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. ALK is part of a big group of Transportation stocks that boast a positive ESP, and investors may want to take a look at United Airlines (UAL) as well. Slated to report earnings on October 15, 2024, United Airlines holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $3.25 a share 28 days from its next quarterly update. United Airlines' Earnings ESP figure currently stands at +6.73% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $3.05. ALK and UAL's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report. 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 >> Only $1 to See All Zacks' Buys and Sells We're not kidding. Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent. Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone. Want the latest recommendations from Zacks Investment Research? Today, you can download 5 Stocks Set to Double. Click to get this free report Alaska Air Group, Inc. (ALK) : Free Stock Analysis Report United Airlines Holdings Inc (UAL) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

These 2 Transportation Stocks Could Beat Earnings: Why They Should Be on Your Radar

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