Perhaps the most significant figure in a company’s quarterly financial report is its earnings. Although Wall Street obviously pays close attention to management’s comments and all the other data, the EPS number helps cut through the clutter.
While the profits number is essential in and of itself, the performance of the bottom line may occasionally be just as, if not more, significant. Consequently, investors want to think about keeping a careful eye on these earnings surprises, as a strong beat might propel a stock higher yet.
As recent analyst earnings revisions can be more accurate than projections made weeks or even months ahead of the actual release date, this is how the Zacks Expected Surprise Prediction, or ESP, operates. The reasoning for this is simple: analysts with more knowledge are likely to submit profit projections closer to the report. In light of this, the Expected Surprise Prediction contrasts the Zacks Consensus Estimate overall with the Most Accurate Estimate, which is the most recent. The ESP figure is given by the percentage difference.
As previously mentioned, the Earnings ESP for Lincoln National is 0.56%. This is determined by dividing the Most Accurate Estimate of $1.80 by the Zacks Consensus Estimate of $1.79.
LNC is among the few Finance stocks in a big database with positive ESPs. American International Group is another stock that appears to be reliable (AIG).
On November 1, 2023, American International Group—a stock with a Zacks Rank #2 (Buy)—will release its results. Twelve days before AIG releases its next earnings report, its Most Accurate Estimate is $1.62 per share.
The difference of 4.02% between American International Group’s Most Accurate Estimate and its Zacks Consensus Estimate of $1.55 is the percentage.
The favourable ESP statistics for LNC and AIG indicate that there is a significant possibility that both stocks will surpass analyst forecasts in their next earnings release.