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

Zacks' Earnings ESP tool is presented as a systematic method for identifying stocks poised to deliver positive earnings surprises. Combining a positive Earnings ESP, derived from comparing the most accurate analyst estimate to the consensus, with a Zacks Rank of #3 (Hold) or better, has historically predicted positive earnings surprises 70% of the time and generated average annual returns of 28.3% over a 10-year backtest. This quantitative approach, exemplified by DTE Energy's current positive ESP and Hold rating, offers investors a data-driven strategy to potentially capitalize on earnings beats.

Analysis

The article outlines a quantitative strategy for identifying stocks with a high probability of delivering a positive earnings surprise, centered on the Zacks Earnings ESP (Expected Surprise Prediction) model. This model's core thesis is that analyst estimates revised closer to an earnings release are more informed. Historically, combining a positive ESP with a Zacks Rank of #3 (Hold) or better has resulted in a positive earnings surprise 70% of the time, generating an average annual return of 28.3% in a 10-year backtest. The analysis highlights DTE Energy (DTE) as a current example fitting these criteria ahead of its July 24, 2025 earnings report. DTE holds a Zacks Rank #3 (Hold) and exhibits a positive Earnings ESP of +1.19%, derived from a Most Accurate Estimate of $1.70 per share versus a Zacks Consensus Estimate of $1.68. This positions DTE, according to the model, as a candidate poised to exceed bottom-line expectations.

Key Decisions for Investors

• Investors with a tactical, event-driven strategy may consider DTE Energy's positive +1.19% Earnings ESP as a signal for a potential upside catalyst from an earnings beat in its upcoming report.
• While the ESP signal is positive, DTE's #3 (Hold) rating suggests the stock is expected to perform in-line with the market, indicating the potential earnings beat may be a short-term driver rather than a signal of fundamental outperformance.
• Traders could utilize the described ESP framework as a screening tool to identify other companies in their watchlist that exhibit a higher statistical probability of surprising on earnings.