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nywhere Real Estate (HOUS) appears to be a promising pick, given its recent upgrade to a Zacks Rank #2 (Buy). This change reflects an upward trend in earnings estimates, which is a key driver of stock prices. The Zacks rating system focuses solely on a company's changing earnings picture, tracking the consensus of EPS estimates from sell-side analysts covering the stock.

    The power of a changing earnings picture makes the Zacks rating system valuable for individual investors, as it provides an objective measure that can be difficult to discern in real-time. The upgrade for Anywhere Real Estate is essentially a positive comment on its earnings outlook, which could have a favorable impact on its stock price.

    Research has shown a strong correlation between trends in earnings estimate revisions and near-term stock movements. Institutional investors also play a role, using earnings estimates to calculate fair value and driving bulk investment action that leads to price movement. Rising earnings estimates and the consequent rating upgrade for Anywhere Real Estate imply an improvement in its underlying business.

    Investors should respond positively to this improving trend by pushing the stock higher. The Zacks Rank stock-rating system effectively harnesses the power of earnings estimate revisions, using four factors related to earnings estimates to classify stocks into five groups. With a proven track record since 1988, Zacks Rank #1 stocks have generated an average annual return of +25%.