Why Investors Need to Take Advantage of These 2 Oils and Energy Stocks Now

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.

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 #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 Talos Energy?

The final step today is to look at a stock that meets our ESP qualifications. Talos Energy (TALO) earns a #3 (Hold) seven days from its next quarterly earnings release on February 24, 2026, and its Most Accurate Estimate comes in at -$0.19 a share.

Talos Energy's Earnings ESP sits at +30.49%, which, as explained above, is calculated by taking the percentage difference between the -$0.19 Most Accurate Estimate and the Zacks Consensus Estimate of -$0.27. TALO 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.

TALO is one of just a large database of Oils and Energy stocks with positive ESPs. Another solid-looking stock is Enterprise Products Partners (EPD).

Enterprise Products Partners is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on May 5, 2026. EPD's Most Accurate Estimate sits at $0.69 a share 77 days from its next earnings release.

The Zacks Consensus Estimate for Enterprise Products Partners is $0.68, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +2.46%.

TALO and EPD'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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