How to Find Strong Oils and Energy Stocks Slated for Positive Earnings Surprises

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.

The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.

Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.

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.

Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.

Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest.

Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, or the top 15% and top 5% of stocks, respectively, should outperform the market. Strong Buy stocks should outperform more than any other rank.

Should You Consider APA?

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. APA (APA) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $0.73 a share, just 19 days from its upcoming earnings release on November 5, 2025.

APA's Earnings ESP sits at +2.06%, which, as explained above, is calculated by taking the percentage difference between the $0.73 Most Accurate Estimate and the Zacks Consensus Estimate of $0.71. APA is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

APA is just one of a large group of Oils and Energy stocks with a positive ESP figure. Transocean (RIG) is another qualifying stock you may want to consider.

Slated to report earnings on October 29, 2025, Transocean holds a #3 (Hold) ranking on the Zacks Rank, and its Most Accurate Estimate is $0.05 a share 12 days from its next quarterly update.

The Zacks Consensus Estimate for Transocean is $0.04, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +31.58%.

APA and RIG's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.

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

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