Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.

We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.

2 Stocks to Add to Your Watchlist

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.

The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to look at a qualifying stock. BellRing Brands (BRBR) holds a Zacks Rank #2 at the moment and its Most Accurate Estimate comes in at $0.54 a share 11 days away from its upcoming earnings release on May 5, 2025.

By taking the percentage difference between the $0.54 Most Accurate Estimate and the $0.52 Zacks Consensus Estimate, BellRing Brands has an Earnings ESP of 2.95%.

BRBR is part of a big group of Consumer Staples stocks that boast a positive ESP, and investors may want to take a look at Estee Lauder (EL) as well.

Slated to report earnings on May 1, 2025, Estee Lauder holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.34 a share seven days from its next quarterly update.

The Zacks Consensus Estimate for Estee Lauder is $0.30, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 14.31%.

Because both stocks hold a positive Earnings ESP, BRBR and EL could potentially post earnings beats in their next reports.

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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BellRing Brands Inc. (BRBR) : Free Stock Analysis Report

The Estee Lauder Companies Inc. (EL) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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