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.
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.
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.
With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% 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 Owens Corning?
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. Owens Corning (OC) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at $1.50 a share 28 days away from its upcoming earnings release on February 23, 2026.
By taking the percentage difference between the $1.50 Most Accurate Estimate and the $1.33 Zacks Consensus Estimate, Owens Corning has an Earnings ESP of +12.59%. Investors should also know that OC is one of a large group 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.
OC is just one of a large group of Construction stocks with a positive ESP figure. United Rentals (URI) is another qualifying stock you may want to consider.
Slated to report earnings on January 28, 2026, United Rentals holds a #3 (Hold) ranking on the Zacks Rank, and its Most Accurate Estimate is $11.98 a share two days from its next quarterly update.
United Rentals' Earnings ESP figure currently stands at +0.64% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $11.90.
OC and URI'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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Owens Corning Inc (OC): Free Stock Analysis Report United Rentals, Inc. (URI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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