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.
The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information. With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure.
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Blackstone Inc. (BX) earns a Zacks Rank #3 right now and its Most Accurate Estimate sits at $1.24 a share, just 30 days from its upcoming earnings release on April 17, 2025.
Blackstone Inc.'s Earnings ESP sits at 2%, which, as explained above, is calculated by taking the percentage difference between the $1.24 Most Accurate Estimate and the Zacks Consensus Estimate of $1.22.
BX is just one of a large group of Finance stocks with a positive ESP figure. Aflac (AFL) is another qualifying stock you may want to consider.
Aflac is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on May 7, 2025. AFL's Most Accurate Estimate sits at $1.72 a share 50 days from its next earnings release.
For Aflac, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.69 is 2.08%.
BX and AFL's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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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This article originally published on Zacks Investment Research (zacks.com).
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