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

Zacks flags Entergy and Dominion Energy as potential earnings-surprise candidates ahead of their reports: Entergy’s November 2, 2026 estimate is $1.72 per share versus $1.71 consensus (ESP +1.01%), while Dominion’s October 30 estimate is $1.23 versus $1.19 (ESP +3.29%). Both carry a Zacks Rank #3 (Hold); the article cites a 70% positive-surprise rate and 28.3% average annual returns in a 10-year backtest for stocks with a #3 rank or better and positive ESP, but these are historical results, not guarantees.

Analysis

The signal is tactical, not fundamental: a positive estimate spread reflects recent analyst revisions, not evidence that regulated earnings power or cash generation has improved. The absolute gaps are small—$0.04/share for Dominion Energy and $0.01/share for Entergy—so routine weather, fuel, outage/restoration, or expense variance could swamp the implied edge. The article’s backtest and hit-rate claims are promotional; without methodology, sample construction, transaction costs, and out-of-sample results, they should not determine sizing.

For the October 30 and November 2 reports, the main opportunity is event repricing if revisions are corroborated by guidance and operating metrics. A beat alone may not lift shares if it is driven by timing or accompanied by higher financing needs, weaker rate-base investment recovery, or adverse regulatory outcomes. Those factors matter more over the next 6–18 months than a single-quarter surprise. A broad move in rates could also dominate any earnings reaction; XLU is a useful sector-relative benchmark, not a clean hedge for company-specific event risk. No basis is provided to rank D over ETR on fundamentals merely because its estimate spread is larger.

Key Decisions for Investors

• Do not buy either stock solely on the ESP screen. Before earnings, verify the estimate revision dates and dispersion, then check company guidance, weather assumptions, fuel costs, outage/restoration effects, and regulatory updates.
• Treat both reports as watch-list catalysts, not high-conviction directional trades. If taking event exposure, keep size small and define maximum loss; avoid an unhedged short-dated options position unless implied volatility and expected move offer favorable pricing.
• After results, consider a relative-value position only if one company delivers a clearly stronger underlying operating/guidance outcome and its move materially outperforms the other and XLU. Do not infer that from the ESP figures alone.
• Falsify a positive-surprise thesis if reported EPS misses the consensus available immediately before release, management lowers full-year guidance, or the beat is explained by timing rather than durable operating performance. Reassess separately for a material rate, regulatory, or financing development.