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.
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 Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more 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.
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 Marathon Petroleum?
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. Marathon Petroleum (MPC) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $1.21 a share, just 20 days from its upcoming earnings release on May 5, 2026.
By taking the percentage difference between the $1.21 Most Accurate Estimate and the $1.1 Zacks Consensus Estimate, Marathon Petroleum has an Earnings ESP of +10.17%. Investors should also know that MPC 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.
MPC is part of a big group of Oils and Energy stocks that boast a positive ESP, and investors may want to take a look at Coterra Energy (CTRA) as well.
Coterra Energy, which is readying to report earnings on May 4, 2026, sits at a Zacks Rank #1 (Strong Buy) right now. Its Most Accurate Estimate is currently $0.99 a share, and CTRA is 19 days out from its next earnings report.
For Coterra Energy, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.91 is +9.39%.
MPC and CTRA'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 >>
Should You Invest in Marathon Petroleum Corporation (MPC)?
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Marathon Petroleum Corporation (MPC): Free Stock Analysis Report
Coterra Energy Inc. (CTRA): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).