Stocks opened slightly higher on Wednesday as investors begin to reap some rewards from the start of first quarter earnings season. Despite this recent market momentum, uncertainty is still present, which means investors need to continue to utilize Q1 earnings season in order to look for stocks set to top earnings estimates.
First-quarter earnings season has already helped some stocks kick back into high gear, including streaming giant Netflix, Inc. (NASDAQ:NFLX). But just because the overall market has performed relatively well over the last week, doesn’t mean that earnings season will be a net positive for every stock. In fact, a slow quarter or a big earnings miss could lead to even further declines.
Luckily, Zacks Premium customers can utilize the Earnings ESP Screener in order to search for stocks that are expected to surprise.
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.
Let’s take a look at three stocks that look ready to beat first quarter earnings estimates.
Stocks Set to Beat Q1 Earnings Estimates: Capital One Financial Corp. (COF)
Shares of Capital One Financial Corp. (NYSE:COF) are down just 1.2% over the last month, which shows that it has been a bit more resistant to the nearly market-wide downturn than many other stocks.
The credit card company is projected to see its quarterly revenues climb by 6.4% to hit $6.96 billion, based on our current Zacks Consensus Estimates. Meanwhile, Capital One’s Q1 earnings are expected to surge by 32% to $2.31 per share.
Better still, Capital One is currently a Zacks Rank #3 (Hold) and sports an Earnings ESP of 0.79%. The company’s Most Accurate Estimate—the representation of the most recent analyst sentiment—calls for earnings of $2.33 per share, which comes in 2 cents above our current consensus estimate.
This means that Capital One is a stock that could top earnings estimates when it reports its first quarter financial results after market close on Tuesday, April 24.
Stocks Set to Beat Q1 Earnings Estimates: Wynn Resorts, Limited (WYNN)
Embattled casino giant Wynn Resorts, Limited (NASDAQ:WYNN) looks like it could be headed for more big changes on top after Elaine Wynn recently demanded that Wynn Resorts move quickly to restructure its board.
Wynn Resorts has also seen its stock price pop 3.51% over the last month as investors react more to the business than to its former CEO’s scandal.
Looking ahead to the first quarter, Wynn Resorts is expected to see its revenues climb by 14% to $1.68 billion.
Investors might be even more pleased to note that the company’s earnings are projected to reach $1.92 per share, which would mark a 54.8% expansion from the year-ago period. Wynn Resorts has also experienced positive earnings estimate revision activity recently.
Lastly, WYNN is currently a Zacks Rank #3 (Hold) and holds an Earnings ESP of 0.35%, with its Most Accurate Estimate coming in 1 cent above our current consensus estimate. Therefore, WYNN is a stock that could be ready to top Q1 earnings estimates. The casino company is also expected to report its Q1 financial results on Tuesday, April 24.
Stocks Set to Beat Q1 Earnings Estimates: JetBlue Airways Corporation (JBLU)
Shares of JetBlue Airways Corporation (NASDAQ:JBLU) popped on Wednesday morning as the company inches closer to the release of its first quarter earnings report on April 24. Prior to this surge, JBLU stock had been down more than 11% over the last month.
But JetBlue has earned five upward earnings estimate revisions within the last seven days, and the company’s revenues are expected to climb by nearly 10% to reach $1.76 billion.
Investors might be less pleased to note that JetBlue’s Q1 earnings are expected slip 12% from the year-ago period to hit $0.22 per share. With that said, the company is currently a Zacks Rank #3 (Hold) and boasts an Earnings ESP of 1.02%. This means that JetBlue looks poised to top Q1 earnings estimates.
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