Two factors often determine stock prices in the long run: earnings and interest rates. Investors can’t control the latter, but they can focus on a company’s earnings results every quarter.
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 14 days from its upcoming earnings release on April 17, 2025.
BX has an Earnings ESP figure of 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 part of a big group of Finance stocks that boast a positive ESP, and investors may want to take a look at Redfin (RDFN) as well.
Slated to report earnings on May 6, 2025, Redfin holds a #3 (Hold) ranking on the Zacks Rank, and it’s Most Accurate Estimate is -$0.52 a share 33 days from its next quarterly update.
For Redfin, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of -$0.64 is 18.11%.
Because both stocks hold a positive Earnings ESP, BX and RDFN could potentially post earnings beats in their next reports.
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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