Investors are usually on the lookout for companies that are poised to beat quarterly earnings expectations as it could potentially catapult their stocks and lead to lofty gains.

The Zacks Expected Surprise Prediction (ESP) identifies these companies and the trend of positive earnings estimate revisions activity. By placing the Zacks Consensus for quarterly earnings estimates up against the broader “Most Accurate Estimate” we can see which stocks are more likely to beat expectations.

Here are three stocks to consider in this regard which all sport a Zacks Rank #1 (Strong Buy) at the moment

Air Transport Services Group ATSG: Starting in the transportation sector, Air Transport Services Group is starting to look compelling with the company scheduled to release its third-quarter earnings in early November.

Air Transport is a leading provider of aircraft leasing and air cargo-related transportation services. Third-quarter earnings are expected at $0.47 per share according to Zacks estimates with the Most Accurate Estimate having Q3 EPS at $0.57 a share and suggesting Air Transport could beat expectations by 20%.

Notably, Air Transport most recently blasted its Q2 EPS estimates by 54% in August and is starting to make the case for being undervalued at 11.2X forward earnings.

Arch Capital Group ACGL: Among financials, Arch Capital Group will be a stock to watch ahead of its Q3 report in late October.

Arch Capital offers insurance, reinsurance, and mortgage insurance globally with the Zacks ESP suggesting the company could beat Q3 earnings expectations by 20% as well. The Most Accurate Estimate has Q3 EPS projected at $1.51 versus the Zacks Consensus of $1.26 a share.

It’s noteworthy that Arch Capital beat Q2 EPS estimates by 16% in July and is now expecting double-digit percentage growth on its bottom line for fiscal 2023 and FY24 with ACGL shares trading attractively at 12.1X foward earnings.

WestRock WRK: Lastly, WestRock is an intriguing basic materials stock that is expected to exceed its fiscal fourth-quarter earnings in early November.

As a multinational provider of paper and packaging solutions, WestRock most recently crushed its Q3 EPS estimates by 78% in August. The trend of better-than-expected bottom-line results looks set to continue with the Most Accurate Estimate having Q4 EPS at $0.81 and 21% above the Zacks Consensus of $0.67 a share.

Furthermore, WestRock is attractive at 11.6X forward earnings and offers a generous 3.12% dividend yield which is above its industry average of 2.80% and towers over the S&P 500’s 1.48%.

Takeaway

Rising quarterly and annual earnings estimates are starting to make these companies stand out among their respective sectors with now looking like a great time to buy their stocks. Furthermore, Air Transport Services Group, Arch Capital Group, and WestRock stock are starting to look undervalued at their current levels with another quarter of stellar results expected.
Arch Capital Group Ltd. (ACGL): Free Stock Analysis Report

Air Transport Services Group, Inc (ATSG): Free Stock Analysis Report

WestRock Company (WRK): Free Stock Analysis Report

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