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

The article highlights Zacks' Earnings ESP (Expected Surprise Prediction) tool as a method for identifying stocks likely to beat quarterly earnings expectations. This proprietary metric, which compares the Most Accurate Estimate to the Zacks Consensus Estimate, has shown a 70% success rate in predicting positive earnings surprises when combined with a Zacks Rank #3 (Hold) or better, yielding average annual returns of 28.3% over a 10-year backtest. United Airlines (UAL) is presented as a current example, holding a Zacks Rank #3 and a +2.16% ESP, signaling a potential earnings beat ahead of its July 16, 2025, report.

Analysis

United Airlines (UAL) is flagged as a candidate for a potential positive earnings surprise ahead of its July 16, 2025, report, based on the Zacks Earnings Expected Surprise Prediction (ESP) model. The model identifies a +2.16% ESP for UAL, derived from the difference between the Most Accurate Estimate of $3.85 per share and the Zacks Consensus Estimate of $3.77. According to the provided back-tested data, a positive ESP combined with a Zacks Rank of #3 (Hold) or better has historically preceded a positive earnings surprise 70% of the time, a strategy that has reportedly yielded 28.3% average annual returns over a decade. While the positive ESP suggests a quantitative edge for an earnings beat, UAL's current #3 (Hold) rating indicates an expectation of performance in-line with the broader market, suggesting the potential upside may be more tactical and event-driven around the earnings release rather than a signal of fundamental long-term outperformance.

Key Decisions for Investors

• Investors with a higher risk tolerance might consider a short-term, tactical long position in UAL leading into its July 16, 2025 earnings report to capitalize on the high statistical probability of a positive surprise.
• It is important to weigh the positive ESP signal against the stock's neutral Zacks Rank #3 (Hold), which implies that any post-earnings rally might not be sustained unless accompanied by a significant upward revision in future guidance.
• Beyond this specific stock, consider using the Zacks Earnings ESP filter as a systematic screening tool to identify other potential earnings beat candidates across the portfolio, especially for event-driven strategies during earnings season.