Why Investors Need to Take Advantage of These 2 Consumer Staples Stocks Now

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.

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.

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.

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 e.l.f. Beauty?

The final step today is to look at a stock that meets our ESP qualifications. e.l.f. Beauty (ELF) earns a #3 (Hold) 30 days from its next quarterly earnings release on February 5, 2026, and its Most Accurate Estimate comes in at $0.71 a share.

e.l.f. Beauty's Earnings ESP sits at +2.01%, 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. ELF 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.

ELF is just one of a large group of Consumer Staples stocks with a positive ESP figure. Estee Lauder (EL) is another qualifying stock you may want to consider.

Slated to report earnings on February 5, 2026, Estee Lauder holds a #2 (Buy) ranking on the Zacks Rank, and its Most Accurate Estimate is $0.86 a share 30 days from its next quarterly update.

For Estee Lauder, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.82 is +3.82%.

ELF and EL'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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This article originally published on Zacks Investment Research (zacks.com).

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