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.
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.
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. Entergy (ETR) earns a Zacks Rank #3 right now and its Most Accurate Estimate sits at $0.76 a share, just eight days from its upcoming earnings release on April 29, 2025.
Entergy’s Earnings ESP sits at 23.08%, which, as explained above, is calculated by taking the percentage difference between the $0.76 Most Accurate Estimate and the Zacks Consensus Estimate of $0.62.
ETR is just one of a large group of Utilities stocks with a positive ESP figure. NextEra Energy (NEE) is another qualifying stock you may want to consider.
Slated to report earnings on April 23, 2025, NextEra Energy holds a #3 (Hold) ranking on the Zacks Rank, and it’s Most Accurate Estimate is $0.99 a share two days from its next quarterly update.
The Zacks Consensus Estimate for NextEra Energy is $0.97, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 2.33%.
ETR and NEE’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 >>