Thus, a high or negative Earnings ESP rating suggests real earnings will deviate from expectations. The model solely predicts positive ESP readings.
An earnings beat is likely with a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold). Stocks with this combination deliver a positive surprise approximately 70% of the time, and a strong Zacks Rank boosts Earnings ESP prediction.
Negative Earnings ESP does not indicate an earnings miss. For firms with negative Earnings ESP and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell), we found it challenging to anticipate an earnings beat.
How Have IBM's Numbers Looked? IBM's Most Accurate Estimate is lower than the Zacks Consensus Estimate, signaling analysts are negative on earnings. This yields -0.08% Earnings ESP. The stock has a #2 Zacks Rank.This combination makes it hard to forecast that IBM will beat the consensus EPS estimate.
Earnings Surprise History: Any Hint? Analysts assess how well a firm matches consensus expectations when estimating future earnings. Thus, the surprise history should be examined to determine its impact on the forthcoming figure.
IBM beat expectations by 3.77% by reporting $2.20 per share earnings in the past quarter. Three times in the previous four quarters, the firm beat consensus EPS projections.
A stock may move up or down without an earnings beat or miss. Despite an earnings beat, several companies fall owing to market disappointment. Many equities rise despite earnings misses due to unexpected triggers.
Betting on stocks projected to outperform earnings estimates increases success odds. Checking a company's Earnings ESP and Zacks Rank before a quarterly release is wise. Our Earnings ESP Filter will help you find the best stocks to buy or sell before reporting.
IBM doesn't seem earnings-beatable. Investors should consider other variables before betting on or avoiding this stock before its earnings announcement.