How to Find Strong Consumer Staples Stocks Slated for Positive Earnings Surprises

Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.

We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.

The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.

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.

Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.

In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.

Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, 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 Smucker?

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. Smucker (SJM) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $2.24 a share, just 12 days from its upcoming earnings release on August 26, 2026.

By taking the percentage difference between the $2.24 Most Accurate Estimate and the $2.19 Zacks Consensus Estimate, Smucker has an Earnings ESP of +2.22%. Investors should also know that SJM is one of a large group 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.

SJM is part of a big group of Consumer Staples stocks that boast a positive ESP, and investors may want to take a look at Sysco (SYY) as well.

Slated to report earnings on October 27, 2026, Sysco holds a #3 (Hold) ranking on the Zacks Rank, and its Most Accurate Estimate is $1.20 a share 74 days from its next quarterly update.

The Zacks Consensus Estimate for Sysco is $1.17, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +2.37%.

SJM and SYY'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 J. M. Smucker Company (SJM)?

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

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