April 23, 2019

Learn How to Build Your Own StarMine Earnings Surprise Forecast

by David Aurelio.

Don’t be surprised when your holdings show up on the StarMine Earnings Surprise Forecast within the “This Week in Earnings” report from Refinitiv. The Screener app within Eikon from Refinitiv can tell you which companies will be included before the report is published.

The busiest week of the 19Q1 earnings season is here. Over 30% of the S&P 500’s companies (155) are expected to report first quarter earnings between Apr. 22 and Apr. 26. As companies report many financial media outlets and financial industry professionals will turn to the “This Week in Earnings” report from Refinitiv for results vs. estimates, growth expectations, corporate guidance, weekly revisions, and the StarMine Earnings Surprise Forecast.

The StarMine Earnings Surprise Forecast uses StarMine’s SmartEstimates® and I/B/E/S mean estimates from Refinitiv to determine which companies in the S&P 500 are poised to beat and miss earnings estimates and include the StarMine Analyst Revisions Model (ARM) scores to show analyst sentiment for those companies.  In this article, we show you how to use Eikon from Refinitiv to perform the same screen used to populate the companies published in the StarMine Earnings Surprise Forecast of “This Week in Earnings”.

StarMine Earnings Surprise Forecast

The StarMine Earnings Surprise forecast is published weekly as Exhibits 15A and 16A of the “This Week in Earnings” report from Refinitiv. The April 18, 2019 report can be viewed here. The report is updated on the last U.S. business day of the week to Lipper Alpha Insight and a summary as well as a link to the full report can be found here http://bit.ly/TWIESPX.

Apr. 18 “This Week in Earnings” StarMine Earnings Surprise Forecast

To recap, the StarMine Earnings Surprise Forecast uses StarMine’s SmartEstimates® and I/B/E/S mean estimates from Refinitiv to determine which companies in the S&P 500 are poised to beat and miss earnings estimates over the next two weeks and includes the StarMine Analyst Revisions Model (ARM) scores to show analyst sentiment for those companies.

The SmartEstimate® is a weighted average of analyst estimates, with more weight given to more recent estimates and more accurate analysts. Our studies have shown that when the SmartEstimate® differs significantly from the consensus (I/B/E/S mean estimate), the Predicted Surprise accurately predicts the direction of earnings surprises or further revisions 70% of the time. When significant Predicted Surprise for revenue is also present for the period, the accuracy improves to 78%.

StarMine ARM from Refinitiv is an analyst revisions stock ranking model, designed to predict future changes in analyst sentiment. The model incorporates more accurate earnings estimates through the SmartEstimate prediction service. ARM region rankings scores companies by region on a scale of 1 to 100 where 100 represents the most bullish sentiment.

Earnings Surprise Screener Instructions

1] Type “Screener” into the Eikon toolbar and select the Screener app

2] Within the Screener app, set the currency to USD

3] Set the universe to S&P 500

4] Add filters

4a] Expected Report Dates:

4a.1] Select “Expected Report Date” and set the “Financial Period” = FQ1

4a.2] Set the filter to between the next Monday and Friday three weeks out

4b] Positive Predicted Surprise Flag:

4b.1] Select “Preferred Earnings Predicted Surprise Flag” and set the “Financial Period” = FQ1

4b.2] Set the filter to >= 1 to filter for positive predicted surprises.

4c] Negative Predicted Surprise Flag:

4c.1] Repeat step 4b.1 and 4b.2 with the filter set to <= -1 for negative predicted surprises

4d] Set the “Or” operator by clicking on the “and” block between the positive and negative preferred earnings surprise filters

5] Set Display data by adding columns

5a] Select GICS Sector Name

5b] Display the type of preferred earnings:

5b.1] Select “Add new column”

5b.2] Select “Create New Expression” (bottom left hand corner)

5b.3] Within the Expression Editor, type “TR.PreferredMeasureCode” into the Expression box. Then name the Expression “Preferred Earnings Type”. Then select “OK”.

5c] Add Preferred Earnings for the relative fiscal period FQ1

5c.1] Add the SmartEstimate, Mean Estimate, and Predicted Surprise Pct

5d] Add the Analyst Revisions Model (ARM) Region Rank

6] The screen is now set up and can be downloaded into Excel

7] Save the screen and template for future use

If properly set up using the instructions above, this screen will provide Eikon users with a preview of the S&P 500 companies that will be published to the StarMine Earnings Surprise Forecast within the “This Week in Earnings” report.

Intrigued by the idea of being able to build out your own StarMine Earnings Surprise Forecast ahead of industry reports?
We here at Refinitiv can help you do this. Yes, tell me more >>

Each quarter we use StarMine models to pick five North American companies likely to report positive earnings surprises and five likely to post negative surprises. The 19Q1 picks are now out and can be viewed in the articles below:

StarMine Models Pick North American Companies for 19Q1 Earnings Misses

StarMine Models Pick North American Companies for 19Q1 Earnings Beats

I/B/E/S Estimates from Refinitiv are a market leader, boasting 200+ metrics and indicators across 12 industries. Find more information on our estimates data.

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