Why Huntington Bancshares (HBAN) is set to beat earnings estimates again
Looking for a stock that has consistently exceeded earnings estimates and could be well positioned to keep the streak alive in its next quarterly report? Huntington Bancshares (HBAN), which belongs to the Zacks Banks – Midwest industry, could be an excellent candidate to consider.
This regional bank holding company has an established record of beating earnings estimates, especially when looking at the previous two reports. The company claims an average surprise for the last two quarters of 4.55%.
Last quarter, Huntington Bancshares was expected to post earnings of $0.34 per share, but instead reported $0.36 per share, a surprise 5.88%. For the previous quarter, the consensus estimate was $0.31 per share, when it actually produced $0.32 per share, a surprise of 3.23%.
Price and Surprise EPS
Thanks in part to this story, there has been a favorable shift in earnings estimates for Huntington Bancshares lately. In fact, the Zacks ESP Earnings (Expected Surprise Prediction) for the stock is positive, which is a great indicator of a beat in earnings, especially when combined with its strong Zacks ranking.
Our research shows that stocks with the combination of a positive ESP on earnings and a Zacks rank of #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that exceeded the consensus estimate could be as high as seven.
The Zacks Earnings ESP compares the most accurate estimate to the Zacks consensus estimate for the quarter; the most accurate estimate is a version of the Zacks Consensus whose definition is tied to change. The idea here is that analysts revising their estimates just before a publication of results have the most up-to-date information, which could potentially be more accurate than they and other consensus contributors had predicted earlier.
Huntington Bancshares currently has an earnings ESP of +0.72%, suggesting that analysts have recently become optimistic about the company’s earnings outlook. This positive earnings ESP when combined with the action’s Zacks rank #3 (Hold) indicates that another beat may be around the corner. We expect the company’s next earnings report to be released on October 21, 2022.
When the ESP of earnings turns negative, investors should note that this will reduce the predictive power of the metric. But, a negative value is not indicative of a stock’s loss of profit.
Many companies end up beating the consensus EPS estimate, though that’s not the only reason their stocks are gaining. Additionally, some stocks may remain flat even if they end up missing the consensus estimate.
For this reason, it is really important to check a company’s earnings ESP before its quarterly release to increase the chances of success. Be sure to use our Income ESP Filter to discover the best stocks to buy or sell before they are released.
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