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

Zacks promotes its Earnings ESP (Expected Surprise Prediction) tool as a method for identifying stocks likely to beat quarterly earnings estimates, based on comparing the Most Accurate Estimate to the Zacks Consensus Estimate. Historically, a positive ESP combined with a Zacks Rank #3 (Hold) or better has resulted in positive earnings surprises 70% of the time, generating 28.3% average annual returns over a 10-year backtest. Travelers (TRV) and Brookfield Infrastructure Partners (BIP) are highlighted as current finance sector examples, both holding a Zacks Rank #3 and positive ESPs of +8.41% and +3.49% respectively, suggesting a high probability of exceeding analyst expectations in their upcoming reports.

Analysis

The analysis highlights a quantitative strategy for identifying potential earnings beats using the Zacks Expected Surprise Prediction (ESP) model. This model's efficacy is predicated on the premise that the most recent analyst estimates are better informed, with the ESP calculated as the percentage difference between the 'Most Accurate Estimate' and the 'Zacks Consensus Estimate'. The article cites a 10-year backtest suggesting that combining a positive ESP with a Zacks Rank of #3 (Hold) or better has historically resulted in a positive earnings surprise 70% of the time, generating an average annual return of 28.3%. Two finance-sector stocks are identified as currently fitting this criteria: Travelers (TRV) and Brookfield Infrastructure Partners (BIP). TRV exhibits a strong positive ESP of +8.41%, based on a Most Accurate Estimate of $5.75 versus a consensus of $5.30, ahead of its October 16, 2025 earnings. BIP shows a positive ESP of +3.49%, with its Most Accurate Estimate at $0.89 against a consensus of $0.86 for its November 5, 2025 report. Both companies hold a Zacks Rank of #3 (Hold), indicating they meet the minimum rank threshold for this specific earnings surprise strategy.

Key Decisions for Investors

• Investors may consider establishing tactical, event-driven positions in TRV and BIP ahead of their upcoming earnings reports to potentially capitalize on a positive surprise, given their strong positive ESP figures.
• It is crucial to note that both stocks carry a Zacks Rank #3 (Hold), which suggests expectations for in-line market performance, therefore any potential trade should weigh the specific earnings surprise signal against this broader neutral fundamental outlook.
• Beyond these specific tickers, portfolio managers could evaluate the merits of incorporating an 'earnings whisper' screen, such as the described ESP model, as a quantitative tool for identifying short-term trading opportunities across their coverage universe during earnings season.