These 2 Oils and Energy Stocks Could Beat Earnings: Why They Should Be on Your Radar

Zacks Investment Research highlights its proprietary Earnings ESP (Expected Surprise Prediction) tool, designed to identify stocks likely to beat quarterly earnings estimates by comparing the Most Accurate Estimate to the Zacks Consensus Estimate. Backtested data indicates that stocks with a positive ESP and a Zacks Rank #3 (Hold) or better have historically produced positive earnings surprises 70% of the time, delivering average annual returns of 28.3%. The article specifically identifies GE Vernova (GEV) and NextDecade (NEXT) as current examples with significant positive ESPs, suggesting a high probability of exceeding their upcoming earnings forecasts.

Analysis

The provided analysis centers on the Zacks Earnings Expected Surprise Prediction (ESP), a proprietary quantitative model designed to identify companies likely to surpass earnings expectations. The model's efficacy is supported by a 10-year backtest showing that stocks with a positive ESP and a Zacks Rank of #3 (Hold) or better delivered positive earnings surprises 70% of the time, leading to an average annual return of 28.3%. The report highlights two specific energy sector stocks as current examples of this signal. GE Vernova (GEV), with a Zacks Rank of #3, exhibits a positive ESP of +25.18% ahead of its July 23, 2025 earnings report, driven by a Most Accurate Estimate of $1.98 per share versus a consensus of $1.58. Similarly, NextDecade (NEXT), also ranked #3, shows an even larger positive ESP of +43.40%, with its Most Accurate Estimate at -$0.15 per share compared to a consensus of -$0.27 for its August 13, 2025 report. The core insight is that recent, more informed analyst revisions for both companies are substantially more optimistic than the broader consensus, suggesting a high probability of an earnings beat.

Key Decisions for Investors

• Investors should monitor GE Vernova and NextDecade for potential share price appreciation leading into and following their upcoming earnings announcements, given their significant positive Earnings ESPs suggest a high likelihood of beating consensus estimates.
• For event-driven strategies, the substantial forecast divergence in both GEV (+25.18%) and NEXT (+43.40%) may present a tactical opportunity, although this upside potential from an earnings beat must be weighed against their neutral Zacks Rank #3 (Hold) status.
• Consider utilizing the Earnings ESP metric as a supplementary screening tool to identify potential short-term catalysts, but be mindful that it primarily predicts single-quarter earnings surprises rather than long-term fundamental outperformance.