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

The article highlights the Zacks Earnings ESP (Expected Surprise Prediction) as a tool to forecast earnings surprises by comparing the Most Accurate Estimate to the Zacks Consensus Estimate. Historically, stocks with a positive ESP and a Zacks Rank #3 (Hold) or stronger have shown a 70% probability of beating earnings, yielding average annual returns of 28%. Bank of America (BAC) and T. Rowe Price (TROW) are presented as current examples, both holding a Zacks Rank #3 and positive ESPs (+0.91% for BAC, +5.25% for TROW), suggesting a potential for positive earnings surprises in their upcoming reports.

Analysis

The analysis highlights a quantitative strategy for identifying potential earnings beats, centered on the Zacks Earnings ESP (Expected Surprise Prediction) model. This model identifies discrepancies between the Most Accurate Estimate and the Zacks Consensus Estimate, with a positive ESP coupled with a Zacks Rank of #3 (Hold) or better historically correlating with a 70% probability of a positive earnings surprise and average annual returns of approximately 28% in a 10-year backtest. Two financial sector stocks, Bank of America (BAC) and T. Rowe Price (TROW), are identified as currently fitting this profile. Both stocks hold a Zacks Rank #3 (Hold). Bank of America, reporting on October 15, 2025, shows a modest positive ESP of +0.91%, with its Most Accurate Estimate of $0.94 slightly above the $0.93 consensus. T. Rowe Price, reporting on November 7, 2025, presents a more significant signal with an ESP of +5.25%, based on a Most Accurate Estimate of $2.54 versus a consensus of $2.41. The differing magnitudes of their ESPs suggest a stronger conviction from recent analyst revisions for TROW compared to BAC.

Key Decisions for Investors

• Investors with an event-driven strategy should consider positioning for potential upside volatility in Bank of America (BAC) and T. Rowe Price (TROW) ahead of their upcoming earnings reports, given their positive Earnings ESP signals.
• The quantitative signal for T. Rowe Price is notably stronger with an ESP of +5.25% versus +0.91% for Bank of America, suggesting TROW may present a higher-conviction opportunity for an earnings beat based on this specific model.
• While the ESP model points to a potential short-term catalyst, investors should note that both stocks carry a Zacks Rank #3 (Hold), implying expectations for in-line market performance and warranting further due diligence beyond this single predictive indicator.