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

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.

Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.

The Zacks Earnings ESP, Explained

The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.

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.

Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), 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 Exxon Mobil?

The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to quickly look at a qualifying stock. Exxon Mobil (XOM) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at $1.67 a share 21 days away from its upcoming earnings release on January 30, 2026.

XOM has an Earnings ESP figure of +0.63%, which, as explained above, is calculated by taking the percentage difference between the $1.67 Most Accurate Estimate and the Zacks Consensus Estimate of $1.66. Exxon Mobil 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.

XOM is one of just a large database of Oils and Energy stocks with positive ESPs. Another solid-looking stock is EOG Resources (EOG).

EOG Resources is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on February 26, 2026. EOG's Most Accurate Estimate sits at $2.27 a share 48 days from its next earnings release.

The Zacks Consensus Estimate for EOG Resources is $2.26, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +0.18%.

Because both stocks hold a positive Earnings ESP, XOM and EOG 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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This article originally published on Zacks Investment Research (zacks.com).

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