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.

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. Costco (COST) earns a Zacks Rank #3 right now and its Most Accurate Estimate sits at $5.07 a share, just 14 days from its upcoming earnings release on September 26, 2024.

By taking the percentage difference between the $5.07 Most Accurate Estimate and the $5.04 Zacks Consensus Estimate, Costco has an Earnings ESP of 0.62%.

COST is just one of a large group of Retail-Wholesale stocks with a positive ESP figure. Cracker Barrel Old Country Store (CBRL) is another qualifying stock you may want to consider.

Cracker Barrel Old Country Store, which is readying to report earnings on September 19, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $1.20 a share, and CBRL is seven days out from its next earnings report.

The Zacks Consensus Estimate for Cracker Barrel Old Country Store is $1.17, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 2.74%.

COST and CBRL's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.

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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Costco Wholesale Corporation (COST):Free Stock Analysis Report

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