Why Investors Need to Take Advantage of These 2 Oils and Energy Stocks Now

Zacks identifies Kinder Morgan (KMI) and Valero Energy (VLO) as potential earnings-beat candidates ahead of their October 28 and October 22, 2026 reports, respectively. KMI has a #3 (Hold) rank and +5.00% Earnings ESP, based on a $0.35 Most Accurate Estimate versus $0.33 consensus; VLO has a #1 (Strong Buy) rank and +14.33% ESP, with estimates of $20.49 versus $17.92. The article says stocks combining a Zacks Rank of #3 or better with positive ESP produced positive surprises 70% of the time and averaged 28.3% annual returns in a 10-year backtest; neither company has reported results yet.

Analysis

The signal here is a short-dated estimate-revision screen, not evidence that either company’s underlying earnings power has changed. Its advertised historical hit rate and return are vendor-reported backtest figures; without methodology, transaction costs, and out-of-sample results, they are not a reliable basis for sizing an event trade. A positive surprise can also be a poor stock catalyst if it is already priced in or comes with weak forward commentary.

The two names have different earnings transmission. For Kinder Morgan, the key read-through is whether reported results and guidance support durable throughput, contract quality, and project execution; a one-quarter EPS beat alone may have limited impact on a midstream valuation. For Valero, the estimate signal is more exposed to refining-cycle variables. Crack spreads, utilization, feedstock costs, and policy-related costs can overwhelm a bottom-line beat and drive revisions in subsequent quarters. That makes VLO’s apparent upside signal potentially more volatile than KMI’s, not necessarily more attractive on a risk-adjusted basis.

Near-term catalysts are the scheduled October reports. Over the following 1–3 months, watch whether guidance and market-based refining indicators validate the revisions. Over 6–18 months, sustained changes in energy demand, refining capacity, or financing conditions would matter more than this screen. The contrarian point: the article frames a possible beat as a buy signal, but the market may care more about forward earnings durability than the direction of the surprise.

Key Decisions for Investors

• Do not initiate positions solely on the positive ESP figures. Before either report, verify the latest consensus, estimate-revision dates, and whether the cited figures are comparable GAAP or adjusted EPS estimates.
• Keep KMI on an earnings watchlist; assess guidance on throughput, contract mix, and project timing before treating a beat as evidence for a rerating. A miss or weaker outlook on those measures would falsify the constructive read-through.
• Treat VLO as a higher-variance event, not a clean estimate-revision trade. Check contemporaneous crack spreads, utilization, and feedstock/policy cost signals; absent confirmation, avoid chasing into the report.
• For both names, prioritize post-release guidance and subsequent estimate revisions over the headline EPS surprise. If the beat is not accompanied by stronger forward expectations, do not assume the initial price reaction will persist.