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

Zacks Investment Research highlights its Earnings ESP (Expected Surprise Prediction) tool as a method to identify stocks likely to beat quarterly earnings estimates, a strategy historically yielding significant returns. The tool, which compares the 'Most Accurate Estimate' to the 'Zacks Consensus Estimate' and incorporates the Zacks Rank, has demonstrated a 70% positive earnings surprise rate and an average annual return of 28.3% over a 10-year backtest when combined with a Zacks Rank #3 (Hold) or better and a positive ESP. Specifically, medical stocks Boston Scientific (BSX) and Eli Lilly (LLY) are cited as current examples with positive ESPs, indicating a high probability of exceeding analyst expectations in their upcoming earnings reports.

Analysis

The analysis highlights a quantitative strategy for identifying potential earnings beats, focusing on the Zacks Earnings ESP (Expected Surprise Prediction) model. This model has demonstrated significant historical efficacy, producing positive earnings surprises 70% of the time and average annual returns of 28.3% in a 10-year backtest when a positive ESP is combined with a Zacks Rank of #3 (Hold) or better. Two medical sector stocks are flagged as currently meeting these criteria. Boston Scientific (BSX) holds a Zacks Rank #2 (Buy) and a positive ESP of +0.88%, based on its Most Accurate EPS Estimate of $0.73 versus a consensus of $0.72 ahead of its July 23, 2025 report. Similarly, Eli Lilly (LLY), though rated #3 (Hold), shows an even stronger positive ESP of +1.72%, with its Most Accurate Estimate at $5.67 against a consensus of $5.57 for its August 7, 2025 earnings. The core implication is that recent analyst revisions, captured by the ESP metric, suggest both companies are poised to exceed market expectations for their upcoming quarterly EPS figures.

Key Decisions for Investors

• Investors could consider Boston Scientific (BSX) for a tactical long position leading into its earnings, as its #2 (Buy) rating and positive Earnings ESP of +0.88% indicate a high probability of a favorable earnings surprise.
• For Eli Lilly (LLY), the strong +1.72% Earnings ESP suggests a potential upside catalyst from its upcoming report, which may present an opportunity even with its current #3 (Hold) rating.
• While the ESP model points to a likely earnings beat for both BSX and LLY, traders should remember this is a probabilistic indicator and the ultimate stock reaction will also depend on revenue figures, forward guidance, and overall market sentiment on reporting day.