Looking for a stock that might be in a good position to beat earnings at its next report? Consider Baxter International Inc.BAX , a firm in the Medicine-Products industry, which could be a great candidate for another beat.
This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. In fact, in these reports, BAX has beaten estimates by at least 20% in both cases, suggesting it has a nice short-term history of crushing expectations.
Earnings in Focus
Two quarters ago, BAX expected to post earnings of 31 cents per share, while it actually produced earnings of 43 cents per share, a beat of 38.7%. Meanwhile, for the most recent quarter, the company looked to deliver earnings of 29 cents per share, while it actually produced earnings of 36 cents per share instead, a beat of 24.4%.
Thanks in part to this history, recent estimates have been moving higher for Baxter International. In fact, the Earnings ESP for BAX is positive, which is a great sign of a coming beat.
After all, the Zacks Earnings ESP compares the most accurate estimate to the broad consensus, looking to find stocks that have seen big revisions as of late, suggesting that analysts have recently become more bullish on the company's earnings prospects. This is the case for BAX, as the firm currently has a Zacks Earnings ESP of 2.56%, so another beat could be around the corner.
This is particularly true when you consider that BAX has a great Zacks Rank #1 (Strong Buy) which can be a harbinger of outperformance and a signal for a strong earnings profile. And when you add this solid Zacks Rank to a positive Earnings ESP, a positive earnings surprise happens nearly 70% of the time, so it seems pretty likely that BAX could see another beat at its next report, especially if recent trends are any guide.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.