Why Investors Need to Take Advantage of These 2 Oils and Energy Stocks Now

Zacks Investment Research is promoting its proprietary Earnings ESP (Expected Surprise Prediction) system, which identifies stocks likely to beat earnings estimates by comparing the most recent analyst revision against the consensus. The firm claims that combining a positive ESP with a Zacks Rank #3 (Hold) or stronger has historically resulted in positive earnings surprises 70% of the time and yielded average annual returns of 28% over a 10-year period. Matador Resources (MTDR) and Petrobras (PBR), both Zacks Rank #3 energy stocks, are highlighted as current examples with positive ESPs of +3.87% and +6.56% respectively, suggesting potential earnings beats in their upcoming reports.

Analysis

The analysis centers on the Zacks Earnings Expected Surprise Prediction (ESP) model, which aims to forecast earnings beats by identifying recent upward revisions from analysts. According to the firm's 10-year backtest, stocks with a positive ESP combined with a Zacks Rank of #3 (Hold) or higher have historically delivered a positive bottom-line surprise 70% of the time, yielding average annual returns of approximately 28%. Two energy sector stocks are highlighted as currently fitting this model's criteria. Matador Resources (MTDR) carries a Zacks Rank #3 and a positive Earnings ESP of +3.87%, based on a Most Accurate Estimate of $1.42 per share versus a consensus of $1.37 ahead of its October 28, 2025 report. Similarly, Petrobras (PBR), also a Zacks Rank #3, shows a positive ESP of +6.56%, with its Most Accurate Estimate at $0.65 per share against a consensus of $0.61 for its November 6, 2025 earnings release. The positive ESP figures for both firms suggest an increased statistical probability, per the Zacks methodology, of them exceeding consensus earnings expectations in their upcoming quarterly reports.

Key Decisions for Investors

• Investors with a higher risk tolerance for event-driven strategies may consider tactical positions in Matador Resources (MTDR) and Petrobras (PBR) ahead of their upcoming earnings reports, given the positive ESP signals that suggest a heightened probability of an earnings beat.
• It is important to weigh the positive ESP signal against the neutral Zacks Rank #3 (Hold) for both companies, which implies an expectation of in-line market performance rather than significant outperformance.
• Traders focused on earnings season could apply the described ESP methodology more broadly to screen the Oils and Energy sector for other potential surprise candidates, as MTDR and PBR are presented as examples of a wider group.