How to Find Strong Consumer Discretionary Stocks Slated for Positive Earnings Surprises

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 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.

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 V.F.?

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. V.F. (VFC) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $0.45 a share, just two days from its upcoming earnings release on January 28, 2026.

VFC has an Earnings ESP figure of +4.05%, which, as explained above, is calculated by taking the percentage difference between the $0.45 Most Accurate Estimate and the Zacks Consensus Estimate of $0.43. V.F. 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.

VFC is part of a big group of Consumer Discretionary stocks that boast a positive ESP, and investors may want to take a look at Under Armour (UAA) as well.

Under Armour, which is readying to report earnings on February 6, 2026, sits at a Zacks Rank #3 (Hold) right now. Its Most Accurate Estimate is currently $0.00 a share, and UAA is 11 days out from its next earnings report.

For Under Armour, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of -$0.02 is +100.00%.

VFC and UAA'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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