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

Zacks highlights its Earnings ESP (Expected Surprise Prediction) model, which forecasts quarterly earnings beats by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, demonstrating a 70% success rate for positive surprises and 28% average annual returns when combined with a Zacks Rank #3 or stronger. The model currently indicates that utility stocks Xcel Energy (XEL) and Entergy (ETR) have positive ESPs of +3.05% and +4.23% respectively, suggesting a high probability of exceeding analyst consensus for their upcoming October 30, 2025 earnings reports.

Analysis

Quantitative signals from the Zacks Earnings Expected Surprise Prediction (ESP) model indicate a high probability of positive earnings surprises for two utility stocks, Xcel Energy (XEL) and Entergy (ETR), for their upcoming reports on October 30, 2025. Xcel Energy shows a positive ESP of +3.05%, derived from a Most Accurate Estimate of $1.39 per share versus a Zacks Consensus Estimate of $1.34. Entergy displays a stronger signal with a +4.23% ESP, based on its Most Accurate Estimate of $1.38 per share against a consensus of $1.32. According to the provided 10-year backtest, a positive ESP combined with a Zacks Rank of #3 (Hold) or stronger has historically resulted in a bottom-line beat 70% of the time. Both XEL and ETR currently possess a Zacks Rank #3 (Hold), which designates an expectation of in-line market performance, creating a nuanced scenario where a potential short-term catalyst from an earnings beat contrasts with a neutral medium-term outlook.

Key Decisions for Investors

• Investors could consider initiating tactical long positions in XEL and ETR to capture potential alpha from an expected earnings beat, capitalizing on the model's reported 70% historical success rate for this signal.
• Given that both stocks carry a neutral Zacks Rank #3 (Hold), any position should be viewed as an event-driven trade with a defined exit strategy, as the rating does not imply sustained fundamental outperformance post-earnings.
• For investors prioritizing the strongest signal, Entergy's higher ESP of +4.23% suggests it has a marginally greater quantitative probability of surprising to the upside compared to Xcel Energy.