Why Investors Need to Take Advantage of These 2 Finance Stocks Now

Zacks Investment Research highlights its Earnings ESP (Expected Surprise Prediction) tool as a method to identify companies likely to exceed quarterly earnings estimates. The tool, which compares the most accurate analyst estimate to the consensus, has historically shown that stocks with a positive ESP and a Zacks Rank #3 or better deliver positive earnings surprises 70% of the time, resulting in average annual returns of 28.3% over a 10-year period. American Express (AXP) with a +0.97% ESP and Chubb (CB) with a +17.15% ESP are cited as current examples positioned for potential earnings beats ahead of their October 2025 reports.

Analysis

The analysis highlights a quantitative strategy, the Zacks Expected Surprise Prediction (ESP), designed to identify companies poised to exceed earnings estimates. This model's predictive power is based on the premise that the most recent analyst revisions are better informed. According to a 10-year backtest, stocks with a positive ESP and a Zacks Rank of #3 (Hold) or better have historically delivered a positive earnings surprise 70% of the time, leading to average annual returns of 28.3%. In this context, two finance sector stocks are identified as potential candidates ahead of their Q3 2025 earnings. American Express (AXP) carries a Zacks Rank of #3 (Hold) and a positive, albeit modest, ESP of +0.97%, with its Most Accurate Estimate at $3.99 per share versus a consensus of $3.95. Chubb (CB), also rated #3 (Hold), displays a significantly more pronounced signal with an ESP of +17.15%, reflecting a wide divergence between its Most Accurate Estimate of $6.45 and the consensus of $5.51. The data suggests both companies have a statistically favorable chance of beating earnings, with the potential magnitude of the surprise appearing substantially greater for Chubb.

Key Decisions for Investors

• Investors employing earnings-driven, short-term strategies should consider the positive ESP signals for both American Express (AXP) and Chubb (CB) as potential catalysts for a price increase around their respective October 2025 earnings releases.
• Given its substantially higher ESP of +17.15% compared to AXP's +0.97%, Chubb may offer a more compelling opportunity for a significant earnings beat and a more pronounced subsequent stock reaction.
• While the positive ESPs suggest a potential for a near-term upside surprise, the neutral Zacks Rank of #3 (Hold) for both firms indicates an underlying expectation of in-line market performance, which should be factored in to temper long-term growth expectations based solely on this signal.