Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.

Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.

2 Stocks to Add to Your Watchlist

The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate. The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction.

The final step today is to look at a stock that meets our ESP qualifications. Howmet (HWM) earns a Zacks Rank #3 28 days from its next quarterly earnings release on February 11, 2025, and its Most Accurate Estimate comes in at $0.72 a share.

HWM has an Earnings ESP figure of 0.67%, which, as explained above, is calculated by taking the percentage difference between the $0.72 Most Accurate Estimate and the Zacks Consensus Estimate of $0.71.

HWM is just one of a large group of Aerospace stocks with a positive ESP figure. Embraer (ERJ) is another qualifying stock you may want to consider.

Embraer, which is readying to report earnings on March 17, 2025, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.53 a share, and ERJ is 62 days out from its next earnings report.

The Zacks Consensus Estimate for Embraer is $0.49, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 8.9%.

HWM and ERJ's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

Find Stocks to Buy or Sell Before They're Reported

Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

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Howmet Aerospace Inc. (HWM) : Free Stock Analysis Report

Embraer-Empresa Brasileira de Aeronautica (ERJ) : Free Stock Analysis Report

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