Why Lear (LEA) Could Beat Earnings Estimates Again

Core Viewpoint - Lear (LEA) is positioned to potentially continue its earnings-beat streak in the upcoming report, supported by a history of surpassing earnings estimates and a positive earnings surprise average of 5.57% over the last two quarters [1]. Earnings Performance - In the last reported quarter, Lear achieved earnings of $2.79 per share, exceeding the Zacks Consensus Estimate of $2.69 per share, resulting in a surprise of 3.72% [2]. - In the previous quarter, Lear was expected to report earnings of $3.23 per share but delivered $3.47 per share, leading to a surprise of 7.43% [2]. Earnings Estimates and Predictions - Estimates for Lear have been trending higher, influenced by its history of earnings surprises, and the stock currently has a positive Zacks Earnings ESP of +2.54%, indicating bullish sentiment among analysts regarding its near-term earnings potential [5][8]. - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a strong likelihood of another earnings beat, with historical data showing that stocks with this combination beat consensus estimates nearly 70% of the time [6][8]. Earnings ESP Explanation - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions, which may provide a more accurate prediction of earnings [7]. - A negative Earnings ESP can reduce predictive power but does not necessarily indicate an earnings miss [9]. Importance of Earnings ESP - While many companies may beat consensus EPS estimates, this alone may not drive stock prices higher; thus, checking a company's Earnings ESP before quarterly releases is crucial for increasing the odds of success [10].