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Want Better Returns? Don't Ignore These 2 Consumer Discretionary Stocks Set to Beat Earnings
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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.
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.
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 Cintas?
The final step today is to look at a stock that meets our ESP qualifications. Cintas (CTAS - Free Report) earns a #2 (Buy) nine days from its next quarterly earnings release on September 23, 2026, and its Most Accurate Estimate comes in at $1.40 a share.
CTAS has an Earnings ESP figure of +3.60%, which, as explained above, is calculated by taking the percentage difference between the $1.40 Most Accurate Estimate and the Zacks Consensus Estimate of $1.35. Cintas is one of a large database 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.
CTAS is part of a big group of Consumer Discretionary stocks that boast a positive ESP, and investors may want to take a look at Ralph Lauren (RL - Free Report) as well.
Ralph Lauren, which is readying to report earnings on November 5, 2026, sits at a Zacks Rank #3 (Hold) right now. Its Most Accurate Estimate is currently $4.31 a share, and RL is 52 days out from its next earnings report.
Ralph Lauren's Earnings ESP figure currently stands at +2.43% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $4.21.
Because both stocks hold a positive Earnings ESP, CTAS and RL 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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Want Better Returns? Don't Ignore These 2 Consumer Discretionary Stocks Set to Beat Earnings
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.
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.
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 Cintas?
The final step today is to look at a stock that meets our ESP qualifications. Cintas (CTAS - Free Report) earns a #2 (Buy) nine days from its next quarterly earnings release on September 23, 2026, and its Most Accurate Estimate comes in at $1.40 a share.
CTAS has an Earnings ESP figure of +3.60%, which, as explained above, is calculated by taking the percentage difference between the $1.40 Most Accurate Estimate and the Zacks Consensus Estimate of $1.35. Cintas is one of a large database 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.
CTAS is part of a big group of Consumer Discretionary stocks that boast a positive ESP, and investors may want to take a look at Ralph Lauren (RL - Free Report) as well.
Ralph Lauren, which is readying to report earnings on November 5, 2026, sits at a Zacks Rank #3 (Hold) right now. Its Most Accurate Estimate is currently $4.31 a share, and RL is 52 days out from its next earnings report.
Ralph Lauren's Earnings ESP figure currently stands at +2.43% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $4.21.
Because both stocks hold a positive Earnings ESP, CTAS and RL 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 >>