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

The article highlights the Zacks Earnings ESP (Expected Surprise Prediction) tool as a method for identifying potential earnings surprises, which compares the Most Accurate Estimate to the Zacks Consensus Estimate. Historically, stocks with a positive ESP and a Zacks Rank #3 (Hold) or better have shown a 70% probability of positive earnings surprises, yielding average annual returns of 28.3% over a decade. Louisiana-Pacific (LPX) is presented as a current example, holding a Zacks Rank #3 and a +4.05% ESP for its upcoming November 5, 2025 earnings, with a Most Accurate Estimate of $0.39 against a $0.37 consensus.

Analysis

The article highlights the Zacks Earnings ESP (Expected Surprise Prediction) tool as a method for identifying potential earnings beats. This proprietary tool compares the Most Accurate Estimate to the Zacks Consensus Estimate, with a positive percentage difference indicating a higher probability of a positive surprise. Historically, stocks combining a positive ESP with a Zacks Rank #3 (Hold) or better have demonstrated a 70% likelihood of reporting a positive earnings surprise.

This strategy has yielded significant historical returns, averaging 28.3% annually over a 10-year backtest. Louisiana-Pacific (LPX) is presented as a current qualifying example, holding a Zacks Rank #3 (Hold) and an Earnings ESP of +4.05%. This positive ESP is derived from a Most Accurate Estimate of $0.39 per share against a Zacks Consensus Estimate of $0.37 for its upcoming November 5, 2025 earnings release.

The underlying premise is that more recent analyst revisions, captured by the Most Accurate Estimate, tend to be more precise due to updated information. Zacks Investment Research, the developer of this tool, boasts a long-term track record, with its Zacks Rank system outperforming the S&P 500 by an average of +24.08% annually since 1988. This suggests a robust methodology for identifying potential outperformance in corporate earnings.

Key Decisions for Investors

• Investors should consider Louisiana-Pacific (LPX) as a potential short-term trading opportunity given its positive Earnings ESP of +4.05% and Zacks Rank #3 ahead of its November 5, 2025 earnings release.
• Evaluate the Zacks Earnings ESP methodology for broader application in identifying other potential earnings surprise candidates, leveraging its historical 70% success rate and 28.3% average annual returns.
• Monitor LPX's actual earnings results and the market's reaction post-announcement to assess the predictive power of the ESP in this specific instance.