Why Investors Need to Take Advantage of These 2 Medical Stocks Now

The article highlights the Zacks Earnings ESP (Expected Surprise Prediction) tool, which forecasts earnings surprises by comparing the Most Accurate Estimate to the Zacks Consensus Estimate. When combined with a Zacks Rank #3 (Hold) or better and a positive ESP, this methodology has historically predicted positive earnings surprises 70% of the time, yielding an average 28.3% annual return over a 10-year backtest. Cigna (CI) and Amgen (AMGN), both Zacks Rank #3 stocks, are presented as current examples with positive ESPs of +0.43% and +0.72% respectively, suggesting a high probability of exceeding their upcoming earnings estimates.

Analysis

The Zacks Earnings Expected Surprise Prediction (ESP) model is presented as a quantitative tool for identifying potential earnings beats. According to its 10-year backtest, a combination of a positive ESP and a Zacks Rank #3 (Hold) or better has historically predicted a positive earnings surprise 70% of the time, leading to an average annual return of 28.3%. Applying this methodology, two Medical sector stocks, Cigna (CI) and Amgen (AMGN), are highlighted as having a heightened probability of exceeding upcoming analyst expectations. Cigna, with a Zacks Rank #3 (Hold), shows a positive ESP of +0.43% based on its Most Accurate Estimate of $7.73 per share versus a consensus of $7.70. Similarly, Amgen, also a Rank #3 (Hold) stock, displays a more significant positive ESP of +0.72%, with its Most Accurate Estimate at $5.05 per share against a consensus of $5.01. Both companies are scheduled to report earnings in late October 2025, positioning them as near-term candidates for a potential earnings-driven catalyst according to this specific analytical framework.

Key Decisions for Investors

• Investors may consider initiating or adding to long positions in Cigna (CI) and Amgen (AMGN) ahead of their late-October earnings reports to potentially capitalize on a positive stock reaction following a forecasted earnings beat.
• While the positive ESP suggests a short-term catalyst, the Zacks Rank #3 (Hold) on both stocks implies they are otherwise expected to perform in-line with the market, so any position should be managed with an understanding of this neutral underlying rating.
• Beyond these specific tickers, portfolio managers could adopt the described methodology, using an Earnings ESP filter to systematically screen for other stocks with a high statistical probability of an earnings surprise to generate potential alpha during earnings season.