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

Zacks highlights its proprietary Earnings ESP (Expected Surprise Prediction) tool as a method to identify stocks likely to beat quarterly earnings estimates. The tool compares the most recent analyst estimate against the consensus, and when combined with a Zacks Rank #3 (Hold) or better, has historically predicted positive earnings surprises 70% of the time, leading to a 28.3% average annual return over a decade. Progressive (PGR), with a +2.72% ESP and Zacks Rank #2, and Wells Fargo (WFC), with a +1.28% ESP and Zacks Rank #3, are presented as current examples poised for potential earnings beats.

Analysis

The provided analysis highlights a quantitative strategy focused on predicting corporate earnings beats, utilizing the proprietary Zacks Earnings Expected Surprise Prediction (ESP) tool. This model identifies companies with a positive ESP—where the most recent analyst estimate is higher than the consensus—and a Zacks Rank of #3 (Hold) or better. The methodology is supported by a 10-year backtest indicating a 70% success rate in predicting positive earnings surprises, which reportedly generated an average annual return of 28.3%. Two finance sector stocks are identified using this framework ahead of their Q3 2025 earnings. Progressive (PGR) is flagged with a Zacks Rank #2 (Buy) and a positive ESP of +2.72%, based on a Most Accurate Estimate of $4.66 per share versus a consensus of $4.53. Wells Fargo (WFC) is also noted, holding a Zacks Rank #3 (Hold) and a positive ESP of +1.28%, derived from a Most Accurate Estimate of $1.55 against a consensus of $1.53. Both companies are therefore positioned as having a statistical likelihood of surpassing their upcoming quarterly earnings estimates according to this specific model.

Key Decisions for Investors

• Investors employing event-driven or short-term catalyst strategies may consider initiating or adding to positions in PGR and WFC ahead of their respective October earnings reports to capitalize on a potential earnings beat.
• Progressive (PGR) appears to be the higher-conviction opportunity within this framework, given its stronger Zacks Rank #2 (Buy) and a more significant positive ESP of +2.72% compared to Wells Fargo.
• While the model's historical 70% success rate is notable, investors should treat this as a probabilistic indicator and remain mindful that a positive earnings surprise does not guarantee a positive stock price reaction.
• Given its 'Hold' rating and lower ESP, Wells Fargo (WFC) could be viewed as a more conservative play on the same theme, or as an opportunity to monitor for confirmation of fundamental strength on reporting day.