Earnings Season Ain’t Over: 3 Stocks Likely to Beat Estimates This Week

Stocks opened lower on Tuesday morning, suggesting that celebrations over the end of the recent sell-off may have been premature. Markets looked prime to bounce back strong from their worst week in two years after Monday’s strong gains, but investors have again been reminded that volatility appears to be back in play.

What is most interesting about the recent market volatility is that it comes on the back of a strong earnings season. Critics will point to large disparities between GAAP and non-GAAP results—created by one-time tax reform charges—as a reason to be skeptical, but revenue growth was truly impressive, and guidance was encouraging across the board.

We have certainly moved past the busy stretch of Q4 earnings season, but a few marquee reports are still trickling in. Athletic retail giant Under Armour UAA just announced its latest results this morning, and tech giants like Cisco Systems CSCO and Applied Materials AMAT are expected later this week.

With that said, one of the best ways for investors to avoid the possibility of continued volatility over the next few trading periods is to target companies that are likely to outperform earnings estimates. Luckily, Zacks Premium customers can utilize the Earnings ESP Screener in order to search for stocks that are expected to beat.

This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.

A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.

Today, we are giving our readers a very special treat: a free look at three of the strongest stocks that are popping up on our Earnings ESP Screener right now. Check them out:

1.       Warrior Met Coal, Inc. (HCC)

Warrior Met Coal is a producer and exporter of premium metallurgical coal, operating primarily in Alabama. The company is scheduled to release its brand-new quarterly report after the market closes on Feb. 14. HCC is currently sporting a Zacks Rank #1 (Strong Buy) and has an Earnings ESP of 5.00%.

Based on our current consensus estimates, we expect Warrior Met to report earnings of $ 1.00 per share and total revenues of $ 227.72 million. The stock’s Most Accurate Estimate, which is the representation of the most recent analyst predictions, is calling for earnings of $ 1.05 per share.


2.       Huntington Ingalls Industries, Inc. (HII)

Huntington Ingalls designs, builds, and maintains nuclear and non-nuclear ships for the U.S. Navy and Coast Guard and provides after-market services for military ships around the globe. The defense firm is scheduled to release its latest report before the market opens on Feb. 15. HII is currently holding a Zacks Rank #1 (Strong Buy) and an Earnings ESP of 5.32%.

Our overall consensus estimates are calling for earnings of $ 2.92 per share and revenues of $ 2.01 billion. These results would represent growth rates of -20.4% and +4.3%, respectively, from the year-ago period.


3.       Deere & Company (DE)

Deere & Company, the parent of the John Deere brand, builds agricultural, construction, and lawn care equipment. The famous American manufacturer is scheduled to release its latest quarterly earnings report before the opening bell on Feb. 16. DE is currently sporting a Zacks Rank #2 (Buy) and has an Earnings ESP of 4.89%.

According to our latest consensus estimates, Deere & Company is expected to report earnings of $ 1.13 per share and revenues of $ 6.40 billion. These results would represent year-over-year growth of 85.3% and 36.3%, respectively.


Want more analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!

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