Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.

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.

2 Stocks to Add to Your Watchlist

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. 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 final step today is to look at a stock that meets our ESP qualifications. NextEra Energy Partners (NEP) earns a Zacks Rank #1 13 days from its next quarterly earnings release on July 24, 2024, and its Most Accurate Estimate comes in at $0.64 a share.

By taking the percentage difference between the $0.64 Most Accurate Estimate and the $0.59 Zacks Consensus Estimate, NextEra Energy Partners has an Earnings ESP of 8.11%.

NEP is part of a big group of Oils-Energy stocks that boast a positive ESP, and investors may want to take a look at Plains All American Pipeline (PAA) as well.

Plains All American Pipeline, which is readying to report earnings on August 2, 2024, sits at a Zacks Rank #2 (Buy) right now. It's Most Accurate Estimate is currently $0.35 a share, and PAA is 22 days out from its next earnings report.

For Plains All American Pipeline, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.31 is 12.9%.

Because both stocks hold a positive Earnings ESP, NEP and PAA 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 >>

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NextEra Energy Partners, LP (NEP):Free Stock Analysis Report

Plains All American Pipeline, L.P. (PAA):Free Stock Analysis Report

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