Will Suncor Energy (SU) Beat Estimates Again in its Next Earnings Report?

Have you been looking for a stock that could be well-positioned to extend its winning streak in the upcoming report? It's worth considering Suncor Energy (SU), which is part of the Zacks Oil and Gas – Integrated Canadian industry.

Looking at the last two reports, this energy company has posted a strong streak of beating earnings estimates. The company has beaten estimates by an average of 19.52% over the past two quarters.

For the most recently reported quarter, Suncor Energy generated earnings of $0.93 per share versus the Zacks Consensus Estimate of $0.76 per share, representing a surprise of 22.37%. For the previous quarter, the company was expected to report earnings of $0.90 per share, but it actually produced earnings of $1.05 per share, a surprise of 16.67%.

Given this earnings history, recent estimates for Suncor Energy have increased. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the company is positive, which bodes well for earnings growth, especially when you combine this metric with the nice Zacks Rank.

Our research shows that stocks with a combination of a positive Earnings ESP and a Zacks Rank #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 beat 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, the definition of which is based on changes. The idea is that analysts who revise their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others who contributed to the consensus had previously predicted.

Suncor Energy currently has an Earnings ESP of +0.50%, suggesting that analysts have become more optimistic about its near-term profit potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #3 (Hold), it shows that another beat may be on the way.

If the Earnings ESP is negative, investors should note that this reduces the metric's predictive power. However, a negative value is not an indication of a decline in a stock's earnings.

Many companies end up beating consensus EPS estimates, but that may not be the only basis for their stocks' rise. On the other hand, some stocks could hold their own even if they end up missing the consensus estimate.

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For this reason, it is very important to check a company's ESP before its quarterly release to increase the chances of success. Make sure to use our Earnings ESP filter to find the best stocks to buy or sell before they are reported.

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