These 2 Transportation Stocks Could Beat Earnings: Why They Should Be on Your Radar

Zacks' Earnings ESP (Expected Surprise Prediction) tool, designed to identify stocks likely to beat quarterly earnings estimates by comparing a 'Most Accurate Estimate' to the 'Zacks Consensus Estimate,' has demonstrated significant historical efficacy. A 10-year backtest showed that combining a positive ESP with a Zacks Rank #3 (Hold) or better resulted in a 70% positive surprise rate and 28.3% average annual returns. The article highlights Delta Air Lines (DAL) and C.H. Robinson Worldwide (CHRW) as current transportation sector examples with positive ESPs (+2.09% and +0.4% respectively) and Zacks Rank #3, suggesting a high probability of exceeding analyst expectations in their upcoming July 2025 earnings reports and presenting potential trading opportunities.

Analysis

The Zacks Earnings ESP (Expected Surprise Prediction) model is highlighted as a quantitative tool for identifying potential earnings beats, leveraging recent upward analyst revisions as a leading indicator. According to a 10-year backtest provided in the report, a combination of a positive ESP and a Zacks Rank of #3 (Hold) or better has historically resulted in a positive earnings surprise 70% of the time, generating average annual returns of 28.3%. The model currently flags two transportation sector stocks: Delta Air Lines (DAL) and C.H. Robinson Worldwide (CHRW). DAL, with a Zacks Rank of #3 (Hold), shows a positive ESP of +2.09% based on a Most Accurate Estimate of $1.97 per share versus a consensus of $1.92, ahead of its July 10, 2025 earnings report. Similarly, CHRW, also a Zacks Rank #3 (Hold), has a positive ESP of +0.4% from a Most Accurate Estimate of $1.20 versus a consensus of $1.19, with its report due on July 30, 2025. The analysis suggests that both companies, based on this specific quantitative signal, have a statistically significant probability of exceeding earnings expectations.

Key Decisions for Investors

• Investors could consider tactical long positions in Delta Air Lines (DAL) and C.H. Robinson (CHRW) ahead of their respective July earnings reports to capitalize on a potential price appreciation following a predicted earnings beat.
• Given DAL's more imminent reporting date and significantly higher ESP of +2.09% compared to CHRW's +0.4%, it represents the more immediate and potent opportunity based on this specific signal.
• Note that both stocks carry a Zacks Rank of #3 (Hold), suggesting they are expected to perform in-line with the market over a longer term; therefore, any positions based on this short-term catalyst should be managed with an awareness that the signal pertains to the earnings event itself, not necessarily a change in the fundamental long-term outlook.