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Why the Earnings Streak Will Continue for American Equity (AEL)


Looking for a stock that might be in a good position to beat earnings at its next report? Consider American Equity Investment Life Insurance Company AEL, a firm in the Insurance – Life Insurance industry, which could be a great candidate for another beat.

This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. In fact, in these reports, AEL has beaten estimates by at least 20% in both cases, suggesting it has a nice short-term history of crushing expectations.

Earnings in Focus

Two quarters ago, AEL was expected to post earnings of 63 cents per share, while it actually produced 96 cents per share, a beat of 52.4%. Meanwhile, for the most recent quarter, the company looked to deliver earnings of 67 cents per share, when it actually saw 82 cents per share instead, representing a 22.4% positive surprise.

American Equity Investment Life Holding Company Price and EPS Surprise

American Equity Investment Life Holding Company Price and EPS Surprise | American Equity Investment Life Holding Company Quote

Thanks in part to this history, recent estimates have been moving higher for American Equity. In fact, the Earnings ESP Earnings ESP for AEL is positive, which is a great sign of a coming beat.

After all, the Zacks Earnings ESP compares the most accurate estimate to the broad consensus, looking to find stocks that have seen big revisions as of late, suggesting that analysts have recently become more bullish on the company’s earnings prospects. This is the case for AEL, as the firm currently has a Zacks Earnings ESP of +1.61%, so another beat could be around the corner.

This is particularly true when you consider that AEL has a great Zacks Rank #2 (Buy), which can be a harbinger of outperformance and a signal for a strong earnings profile. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

When you add this solid Zacks Rank to a positive Earnings ESP, a positive earnings surprise happens nearly 70% of the time, so it seems pretty likely that AEL could see another beat at its next report, especially if recent trends are any guide.

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