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.

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.

Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest.

Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.

Should You Consider Bristol Myers Squibb?

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. Bristol Myers Squibb (BMY Quick QuoteBMY - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $1.60 a share, just six days from its upcoming earnings release on July 30, 2026.

By taking the percentage difference between the $1.60 Most Accurate Estimate and the $1.59 Zacks Consensus Estimate, Bristol Myers Squibb has an Earnings ESP of +0.51%. Investors should also know that BMY 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.

BMY is part of a big group of Medical stocks that boast a positive ESP, and investors may want to take a look at UnitedHealth Group (UNH Quick QuoteUNH - Free Report) as well.

UnitedHealth Group is a Zacks Rank #1 (Strong Buy) stock, and is getting ready to report earnings on October 27, 2026. UNH's Most Accurate Estimate sits at $4.01 a share 95 days from its next earnings release.

UnitedHealth Group's Earnings ESP figure currently stands at +2.11% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $3.93.

BMY and UNH'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 >>