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

The article highlights the Zacks Earnings ESP (Expected Surprise Prediction) tool, which forecasts earnings surprises by comparing the 'Most Accurate Estimate' to the 'Zacks Consensus Estimate,' factoring in the Zacks Rank. Historically, a positive ESP combined with a Zacks Rank #3 (Hold) or stronger has correlated with a 70% probability of an earnings beat and delivered 28% average annual returns over a 10-year backtest. Procter & Gamble (PG) with a +0.31% ESP and e.l.f. Beauty (ELF) with a +17.28% ESP are presented as current consumer staples examples potentially poised for positive earnings surprises, offering a systematic approach for identifying pre-earnings trading opportunities.

Analysis

The Zacks Earnings ESP (Expected Surprise Prediction) model is presented as a quantitative tool for identifying potential earnings beats. According to the provided data, a combination of a positive ESP and a Zacks Rank of #3 (Hold) or better has historically resulted in a positive earnings surprise 70% of the time, with a 10-year backtest indicating average annual returns of approximately 28%. Two consumer staples stocks are highlighted as current examples of this signal. Procter & Gamble (PG), with a Zacks Rank of #3 (Hold), shows a marginal positive signal with an Earnings ESP of +0.31%, based on its Most Accurate Estimate of $1.91 versus the consensus of $1.90 ahead of its October 24, 2025 earnings. In a more pronounced case, e.l.f. Beauty (ELF), also a #3 (Hold) ranked stock, exhibits a significant Earnings ESP of +17.28%, derived from a Most Accurate Estimate of $0.69 compared to a consensus of $0.59 for its report on November 5, 2025. This quantitative divergence suggests that while both companies are flagged for a potential beat, recent analyst revisions for ELF indicate a substantially higher probability and magnitude of a positive earnings surprise compared to PG.

Key Decisions for Investors

• Investors may consider using the Earnings ESP metric as a quantitative screen to identify short-term, catalyst-driven opportunities ahead of earnings reports, as demonstrated with PG and ELF.
• Given e.l.f. Beauty's substantial +17.28% ESP, traders anticipating earnings-related volatility could view this as a strong signal for a potential upside surprise, warranting a closer look at a bullish position or options strategy.
• For Procter & Gamble, the minimal +0.31% ESP suggests a much weaker signal for an earnings beat, advising caution against placing a high-conviction trade based on this metric alone, especially as its #3 (Hold) rank implies expected in-line market performance.