Investors are always looking for stocks that are poised to beat at earnings season and Johnson & Johnson JNJ may be one such company. The firm has earnings coming up pretty soon, and events are shaping up quite nicely for their report.
That is because Johnson & Johnson is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates right before earnings — with the most up-to-date information possible — is a pretty good indicator of some favorable trends underneath the surface for JNJ in this report.
In fact, the Most Accurate Estimate for the current quarter is currently at $1.53 per share for JNJ, compared to a broader Zacks Consensus Estimate of $1.49 per share. This suggests that analysts have very recently bumped up their estimates for JNJ, giving the stock a Zacks Earnings ESP of +2.15% heading into earnings season.
Johnson Johnson Price and EPS Surprise
Why is this Important?
A positive reading for the Zacks Earnings ESP has proven to be very powerful in producing both positive surprises, and outperforming the market. Our recent 10-year backtest shows that stocks that have a positive Earnings ESP and a Zacks Rank #3 (Hold) or better show a positive surprise nearly 70% of the time, and have returned over 28% on average in annual returns (see more Top Earnings ESP stocks here).
Given that JNJ has a Zacks Rank #3 and an ESP in positive territory, investors might want to consider this stock ahead of earnings. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Clearly, recent earnings estimate revisions suggest that good things are ahead for Johnson & Johnson, and that a beat might be in the cards for the upcoming report.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.