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

The article introduces the Zacks Earnings ESP (Expected Surprise Prediction) tool as a method for identifying stocks likely to exceed quarterly earnings estimates, noting that a positive ESP combined with a Zacks Rank #3 (Hold) or better has historically resulted in a 70% success rate for positive surprises and 28.3% average annual returns over a decade. Two utility stocks, AES (AES) and Xcel Energy (XEL), are highlighted as current examples; both hold a Zacks Rank #3 and exhibit positive Earnings ESPs of +6.48% and +0.68% respectively, suggesting a strong probability of beating analyst expectations in their upcoming earnings reports on November 4, 2025, and October 30, 2025.

Analysis

The Zacks Earnings ESP (Expected Surprise Prediction) tool is presented as a robust methodology for identifying stocks likely to exceed quarterly earnings estimates, leveraging recent analyst revisions. Historically, combining a positive ESP with a Zacks Rank #3 (Hold) or better has demonstrated a 70% probability of positive earnings surprises, yielding an average annual return of 28.3% over a 10-year backtest period. This suggests a statistically significant edge for investors focused on short-term earnings performance.

Two utility sector stocks, AES Corporation (AES) and Xcel Energy (XEL), are highlighted as current examples exhibiting these favorable conditions. AES, holding a Zacks Rank #3, shows a positive ESP of +6.48%, derived from a Most Accurate Estimate of $0.74 against a $0.70 consensus for its November 4, 2025, earnings release. Similarly, XEL, also a Zacks Rank #3, has a positive ESP of +0.68% with a Most Accurate Estimate of $1.34 versus a $1.33 consensus for its October 30, 2025, report.

The positive ESP figures for both AES and XEL indicate a strong likelihood of these companies surpassing their respective analyst consensus estimates, aligning with the article's overall optimistic tone. While the general market impact score is moderate at 0.35, these specific insights are highly relevant for investors employing earnings-driven trading strategies within the utilities sector. The per-ticker sentiment for both AES and XEL is positive at 0.6, reinforcing the potential for favorable outcomes.

Key Decisions for Investors

• Consider monitoring AES and XEL closely ahead of their respective earnings dates (November 4, 2025, and October 30, 2025) given their positive Earnings ESPs and Zacks #3 Ranks, which historically correlate with earnings beats.
• Evaluate the potential for short-term price appreciation in these utility stocks, as positive earnings surprises often lead to favorable market reactions.
• Investors should assess their risk tolerance and investment horizon, as earnings-driven strategies carry inherent volatility, despite the historical efficacy of the Zacks ESP tool.