Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.

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.

The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.

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.

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 Murphy USA?

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. Murphy USA (MUSA Quick QuoteMUSA - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $3.70 a share, just five days from its upcoming earnings release on April 29, 2026.

Murphy USA's Earnings ESP sits at +9.47%, which, as explained above, is calculated by taking the percentage difference between the $3.70 Most Accurate Estimate and the Zacks Consensus Estimate of $3.38. MUSA is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

MUSA is part of a big group of Retail and Wholesale stocks that boast a positive ESP, and investors may want to take a look at Target (TGT Quick QuoteTGT - Free Report) as well.

Slated to report earnings on May 20, 2026, Target holds a #3 (Hold) ranking on the Zacks Rank, and its Most Accurate Estimate is $1.35 a share 26 days from its next quarterly update.

For Target, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.34 is +1.00%.

MUSA and TGT'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 >>