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

Zacks outlines its Earnings ESP (Expected Surprise Prediction) methodology, which forecasts earnings surprises by comparing the most accurate analyst estimate to the consensus, integrated with the Zacks Rank. A 10-year backtest reveals that stocks with a Zacks Rank #3 (Hold) or better and a positive ESP achieved positive earnings surprises 70% of the time, generating average annual returns of 28.3%. The firm identifies Walt Disney (DIS) with a +1.59% ESP and Crocs (CROX) with a +0.46% ESP as consumer discretionary examples potentially poised for positive earnings beats.

Analysis

The analysis highlights a quantitative strategy, the Zacks Earnings ESP, designed to predict earnings surprises by identifying discrepancies between the most recent analyst estimates and the broader consensus. The model's credibility is supported by a 10-year backtest indicating that stocks with a positive ESP and a Zacks Rank of #3 (Hold) or better delivered a positive surprise 70% of the time, yielding an average annual return of 28.3%. Applying this framework, Walt Disney (DIS) is presented as a compelling case ahead of its August 6, 2025 earnings report. With a Zacks Rank #2 (Buy) and an Earnings ESP of +1.59%, driven by a Most Accurate Estimate of $1.49 per share versus a consensus of $1.47, the signal suggests a strong likelihood of an earnings beat. Similarly, Crocs (CROX) is identified as another candidate for a positive surprise before its August 7, 2025 report. Although its signal is less pronounced with a Zacks Rank #3 (Hold) and an ESP of +0.46% (based on a $4.06 Most Accurate Estimate vs. a $4.04 consensus), it still meets the criteria for the historically successful model.

Key Decisions for Investors

• Investors may consider using the Zacks Earnings ESP filter as a quantitative tool to screen for potential short-term trading opportunities ahead of earnings announcements, given its historically high probability of predicting positive surprises.
• For Walt Disney (DIS), the combination of a #2 (Buy) rating and a +1.59% ESP presents a strong quantitative signal for a potential earnings beat, which could attract bullish positioning ahead of its August 6 report.
• Crocs (CROX) also shows a positive pre-earnings setup with a +0.46% ESP, though its #3 (Hold) rating suggests a more neutral outlook, warranting a cautiously optimistic approach from investors.
• While the backtested data is compelling, these ESP figures are probabilistic indicators, and investors should still conduct fundamental due diligence as a positive earnings surprise does not guarantee a positive stock price reaction.