Rebound From Market Selloff With 3 Stocks Likely To Beat Earnings

Investors throughout the global markets have begrudgingly accepted the return of volatility over the past few weeks, with trade war fears and increased political turmoil erasing the year-to-date gains of most major indexes and raising serious questions about the longevity of the current bull market.

Conditions appear to have stabilized a bit on Tuesday, but it is probably still too soon to declare a bottom on this correction. Investors are unlikely to agree on specific reasons for the selloff, but a number of factors—including tariff battles with China, data privacy concerns, and President Trump’s criticism of Amazon (NASDAQ:AMZN) —seem to be contributing to hesitation.

For now, stocks might continue to react strongly to political commentary and technical triggers. But the bull market might have at least one saving grace on the horizon: earnings season. Companies will begin to report their latest quarterly financial results en masse over the coming weeks, and estimates indicate that this cycle should extend recent trends of strong earnings and revenue growth.

With that said, the best way for investors to benefit from this earnings season is to target companies that are likely to outperform earnings estimates. Luckily, Zacks Premium customers can utilize the Earnings ESP Screener in order to search for stocks that are expected to beat. Zacks Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst estimates.

This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.

A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.

Today, we are giving our readers a very special treat: a free look at three of the strongest stocks that are popping up on our Earnings ESP Screener right now. Check them out:

1. Lamb Weston Holdings Inc. ( (NYSE:LW) )

Lamb Weston Holdings is a supplier of frozen potato, sweet potato, appetizer and vegetable products to restaurants and retailers. The company is scheduled to release its latest quarterly report before the market opens on April 5. Our consensus estimate is calling for adjusted earnings of 76 cents per share, and with the stock’s Earnings ESP of 11.4% and Zacks Rank #2 (Buy), our model says Lamb Weston could be poised to surpass this mark.

Meanwhile, the Zacks Consensus Estimate for revenues is projecting that Lamb Weston is on track to report net sales of $815.8 million, which would represent a respectable year-over-year improvement of nearly 6.2%.

2. Bed Bath & Beyond Inc. ( (NASDAQ:BBBY) )

Bed Bath & Beyond is a retailer offering a wide selection of domestics merchandise and home furnishings. The company is slated to announce its latest quarterly financial results after the closing bell on April 11. The Zacks Consensus Estimate for earnings is pegged at $1.41 per share, but with BBBY’s Zacks Rank #3 (Hold) and positive Earnings ESP, the company could be ready to surpass this figure.

Bed Bath & Beyond’s earnings are still likely to be down year over year, but our consensus estimate for total revenues is calling for net sales of $3.67 billion, which would represent a gain of about 4.0% from the prior-year quarter.

3. Commerce Bancshares, Inc. ( (NASDAQ:CBSH) )

Commerce Bancshares is a regional bank holding company offering a full range of financial products to consumers and commercial customers. The company is scheduled to report its most recent quarterly results before the market opens on April 12. Our consensus estimate for earnings is projecting CBSH will report per share profits of 79 cents, but with its Zacks Rank #3 (Hold) and ESP of 3.5%, it could be poised to surpass that consensus mark.

Commerce Bancshares reported earnings of 65 cents per share last year. The company is also projected to post total quarterly revenues of $310.1 million, up about 5.0% from the year-ago period.

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