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.
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 ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.
The Zacks Earnings ESP, Explained
The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.
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. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.
In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.
Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.
Should You Consider Eni SpA?
The final step today is to look at a stock that meets our ESP qualifications. Eni SpA (E) earns a #2 (Buy) 30 days from its next quarterly earnings release on October 24, 2025, and its Most Accurate Estimate comes in at $0.71 a share.
E has an Earnings ESP figure of +0.24%, which, as explained above, is calculated by taking the percentage difference between the $0.71 Most Accurate Estimate and the Zacks Consensus Estimate of $0.7. Eni SpA is one of a large database of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
E is part of a big group of Oils and Energy stocks that boast a positive ESP, and investors may want to take a look at Cenovus Energy (CVE) as well.
Slated to report earnings on October 30, 2025, Cenovus Energy holds a #3 (Hold) ranking on the Zacks Rank, and its Most Accurate Estimate is $0.51 a share 36 days from its next quarterly update.
The Zacks Consensus Estimate for Cenovus Energy is $0.45, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +13.33%.
Because both stocks hold a positive Earnings ESP, E and CVE 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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Eni SpA (E): Free Stock Analysis Report Cenovus Energy Inc (CVE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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