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

Zacks Investment Research promotes its Earnings ESP (Expected Surprise Prediction) methodology, which identifies stocks likely to beat quarterly earnings estimates by comparing the Most Accurate Estimate to the Zacks Consensus Estimate. When combined with a Zacks Rank of #3 (Hold) or better, this system has historically predicted positive earnings surprises 70% of the time, generating average annual returns of 28.3% over a ten-year period. The article highlights Philip Morris (PM) and Hershey (HSY) as current examples, both consumer staples with a Zacks Rank #3 and positive ESPs of +0.54% and +1.61% respectively, suggesting a high probability of outperforming analyst expectations in their upcoming reports.

Analysis

The analysis centers on a quantitative signal from Zacks Investment Research, the Earnings Expected Surprise Prediction (ESP), which flags Philip Morris (PM) and Hershey (HSY) as having a high probability of delivering a positive earnings surprise. According to Zacks' methodology, combining a positive ESP with a Zacks Rank of #3 (Hold) or better has historically resulted in a positive earnings surprise 70% of the time, generating average annual returns of 28.3% in a 10-year backtest. Philip Morris currently holds a #3 (Hold) rank and a positive ESP of +0.54%, derived from its Most Accurate Estimate of $2.11 per share versus a consensus of $2.10. Similarly, Hershey also has a #3 (Hold) rank but a stronger positive ESP of +1.61%, based on a Most Accurate Estimate of $1.08 against a consensus of $1.06. While the 'Hold' rating for both consumer staples suggests they are expected to perform in-line with the market, this specific, short-term indicator points to a potential upside catalyst tied directly to their upcoming earnings reports on October 21 and November 6, 2025, respectively.

Key Decisions for Investors

• Investors focused on event-driven or earnings-season strategies should consider Philip Morris and Hershey for a potential short-term trade, as the Zacks ESP model indicates a 70% historical probability of a positive earnings surprise.
• While both companies are flagged, Hershey (HSY) presents a stronger quantitative signal with an ESP of +1.61% compared to Philip Morris's (PM) +0.54%, potentially indicating a higher likelihood or magnitude of an earnings beat.
• It is critical to weigh this short-term catalyst against the neutral Zacks Rank #3 (Hold) for both stocks, which suggests their fundamentals are otherwise expected to yield performance merely in-line with the broader market.