Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.

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.

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. Murphy USA (MUSA) earns a Zacks Rank #2 right now and its Most Accurate Estimate sits at $6.65 a share, just 15 days from its upcoming earnings release on February 5, 2025.

Murphy USA's Earnings ESP sits at 3.42%, which, as explained above, is calculated by taking the percentage difference between the $6.65 Most Accurate Estimate and the Zacks Consensus Estimate of $6.43.

MUSA is just one of a large group of Retail-Wholesale stocks with a positive ESP figure. Lowe's (LOW) is another qualifying stock you may want to consider.

Slated to report earnings on February 26, 2025, Lowe's holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.85 a share 36 days from its next quarterly update.

The Zacks Consensus Estimate for Lowe's is $1.81, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 2.16%.

MUSA and LOW'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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Murphy USA Inc. (MUSA) : Free Stock Analysis Report

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