Wall Street watches a company’s quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
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.
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.
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. Stanley Black & Decker (SWK) earns a Zacks Rank #3 right now and its Most Accurate Estimate sits at $0.48 a share, just 11 days from its upcoming earnings release on July 29, 2025.
Stanley Black & Decker’s Earnings ESP sits at +39.79%, which, as explained above, is calculated by taking the percentage difference between the $0.48 Most Accurate Estimate and the Zacks Consensus Estimate of $0.34.
SWK is one of just a large database of Industrial Products stocks with positive ESPs. Another solid-looking stock is Eaton (ETN).
Slated to report earnings on August 7, 2025, Eaton holds a #3 (Hold) ranking on the Zacks Rank, and its Most Accurate Estimate is $2.93 a share 20 days from its next quarterly update.
The Zacks Consensus Estimate for Eaton is $2.92, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +0.39%.
SWK and ETN’s positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
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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