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.
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.
Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.
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.
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 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 Edgewell Personal Care?
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. Edgewell Personal Care (EPC) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $0.44 a share, just 20 days from its upcoming earnings release on May 6, 2026.
EPC has an Earnings ESP figure of +2.33%, which, as explained above, is calculated by taking the percentage difference between the $0.44 Most Accurate Estimate and the Zacks Consensus Estimate of $0.43. Edgewell Personal Care 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.
EPC is just one of a large group of Consumer Staples stocks with a positive ESP figure. Molson Coors Brewing (TAP) is another qualifying stock you may want to consider.
Molson Coors Brewing is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on April 30, 2026. TAP's Most Accurate Estimate sits at $0.40 a share 14 days from its next earnings release.
For Molson Coors Brewing, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.37 is +9.55%.
Because both stocks hold a positive Earnings ESP, EPC and TAP could potentially post earnings beats in their next reports.
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 Edgewell Personal Care Company (EPC)?
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Zacks Investment Research has been committed to providing investors with tools and independent research since 1978. For more than a quarter century, the Zacks Rank stock-rating system has more than doubled the S&P 500 with an average gain of +24.08% per year. (These returns cover a period from January 1, 1988 through May 6, 2024.)
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Edgewell Personal Care Company (EPC): Free Stock Analysis Report
Molson Coors Beverage Company (TAP): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).