These 2 Oils and Energy Stocks Could Beat Earnings: Why They Should Be on Your Radar

Zacks Investment Research promotes its Earnings ESP (Expected Surprise Prediction) tool as a method for identifying stocks likely to beat quarterly earnings estimates, based on recent analyst revisions. The tool, which calculates the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate, has historically yielded a 70% success rate for positive earnings surprises when combined with a Zacks Rank of #3 (Hold) or better, resulting in average annual returns of 28.3% over a 10-year backtest. Currently, Diamondback Energy (FANG) with a +1.02% ESP and ConocoPhillips (COP) with an +8.04% ESP are highlighted as two oil and energy stocks with positive ESPs, indicating a high probability of exceeding their upcoming earnings forecasts.

Analysis

Quantitative signals suggest a heightened probability of positive earnings surprises for two energy sector firms, Diamondback Energy (FANG) and ConocoPhillips (COP), ahead of their respective August 2025 earnings reports. The analysis is based on the Zacks Earnings Expected Surprise Prediction (ESP), a metric that quantifies the difference between the most recent analyst forecasts and the broader consensus estimate. For Diamondback Energy, the ESP is +1.02%, resulting from a Most Accurate Estimate of $2.60 per share versus a consensus of $2.57. ConocoPhillips displays a more pronounced signal with an +8.04% ESP, based on a Most Accurate Estimate of $1.50 per share against a consensus of $1.38. Both companies currently hold a Zacks Rank of #3 (Hold), a rating which, when combined with a positive ESP, has historically preceded a positive earnings surprise 70% of the time according to the provided 10-year backtest.

Key Decisions for Investors

• Investors with positions in FANG or COP should monitor them closely for potential upside volatility around their early August earnings announcements, given the positive ESP signals.
• Consider that ConocoPhillips shows a significantly stronger potential beat signal (+8.04% ESP) than Diamondback Energy (+1.02% ESP), which could imply a higher degree of conviction from recent analyst revisions.
• Temper short-term bullishness by noting that both stocks carry a neutral Zacks Rank #3 (Hold), indicating an expectation of performance in-line with the broader market, which contrasts with the positive earnings surprise indicator.
• Traders focused on earnings season catalysts may view these stocks as potential long candidates ahead of their reports, while portfolio managers should weigh this short-term signal against the neutral long-term rating.