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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.
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 final step today is to look at a stock that meets our ESP qualifications. Brookfield Renewable Energy Partners (BEP) earns a Zacks Rank #3 10 days from its next quarterly earnings release on May 2, 2025, and its Most Accurate Estimate comes in at -$0.22 a share.
By taking the percentage difference between the -$0.22 Most Accurate Estimate and the -$0.25 Zacks Consensus Estimate, Brookfield Renewable Energy Partners has an Earnings ESP of 11.11%.
BEP is one of just a large database of Utilities stocks with positive ESPs. Another solid-looking stock is Entergy (ETR).
Slated to report earnings on April 29, 2025, Entergy holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.76 a share seven days from its next quarterly update.
The Zacks Consensus Estimate for Entergy is $0.62, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 23.08%.
BEP and ETR'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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