Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.

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.

Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.

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.

In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.

Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, 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 Citigroup?

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. Citigroup (C Quick QuoteC - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $2.67 a share, just six days from its upcoming earnings release on October 13, 2026.

C has an Earnings ESP figure of +0.36%, which, as explained above, is calculated by taking the percentage difference between the $2.67 Most Accurate Estimate and the Zacks Consensus Estimate of $2.66. Citigroup 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.

C is one of just a large database of Finance stocks with positive ESPs. Another solid-looking stock is Travelers (TRV Quick QuoteTRV - Free Report) .

Travelers, which is readying to report earnings on October 16, 2026, sits at a Zacks Rank #2 (Buy) right now. Its Most Accurate Estimate is currently $7.00 a share, and TRV is nine days out from its next earnings report.

For Travelers, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $6.82 is +2.50%.

Because both stocks hold a positive Earnings ESP, C and TRV 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 >>