Want Better Returns? Don't Ignore These 2 Finance Stocks Set to Beat Earnings

Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.

Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.

Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.

The Zacks Earnings ESP, Explained

The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.

The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.

When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% annual returns on average, according to our 10 year backtest.

Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank.

Should You Consider Goldman Sachs?

Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Goldman Sachs (GS) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $13.92 a share, just 27 days from its upcoming earnings release on July 14, 2026.

GS has an Earnings ESP figure of +2.40%, which, as explained above, is calculated by taking the percentage difference between the $13.92 Most Accurate Estimate and the Zacks Consensus Estimate of $13.59. Goldman Sachs is one of a large database of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

GS is just one of a large group of Finance stocks with a positive ESP figure. Digital Realty Trust (DLR) is another qualifying stock you may want to consider.

Digital Realty Trust, which is readying to report earnings on July 23, 2026, sits at a Zacks Rank #3 (Hold) right now. Its Most Accurate Estimate is currently $2.00 a share, and DLR is 36 days out from its next earnings report.

The Zacks Consensus Estimate for Digital Realty Trust is $1.98, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +0.94%.

GS and DLR's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.

Find Stocks to Buy or Sell Before They're Reported

Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

Should You Invest in The Goldman Sachs Group, Inc. (GS)?

Before you invest in The Goldman Sachs Group, Inc. (GS), want to know the best stocks to buy for the next 30 days? Check out Zacks Investment Research for our free report on the 7 best stocks to buy.

Zacks Investment Research has been committed to providing investors with tools and independent research since 1978. For more than a quarter century, the Zacks Rank stock-rating system has more than doubled the S&P 500 with an average gain of +24.08% per year. (These returns cover a period from January 1, 1988 through May 6, 2024.)

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

Source Zacks-com