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.

The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.

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.

The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.

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 BJ's Wholesale Club?

The final step today is to look at a stock that meets our ESP qualifications. BJ's Wholesale Club (BJ Quick QuoteBJ - Free Report) earns a #3 (Hold) three days from its next quarterly earnings release on August 21, 2026, and its Most Accurate Estimate comes in at $1.17 a share.

By taking the percentage difference between the $1.17 Most Accurate Estimate and the $1.15 Zacks Consensus Estimate, BJ's Wholesale Club has an Earnings ESP of +1.34%. Investors should also know that BJ 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.

BJ is part of a big group of Consumer Staples stocks that boast a positive ESP, and investors may want to take a look at Smucker (SJM Quick QuoteSJM - Free Report) as well.

Slated to report earnings on August 26, 2026, Smucker holds a #2 (Buy) ranking on the Zacks Rank, and its Most Accurate Estimate is $2.24 a share eight days from its next quarterly update.

Smucker's Earnings ESP figure currently stands at +1.77% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.21.

Because both stocks hold a positive Earnings ESP, BJ and SJM 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 >>