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.

2 Stocks to Add to Your Watchlist

The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information. 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.

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. Reinsurance Group (RGA) earns a Zacks Rank #2 right now and its Most Accurate Estimate sits at $5.17 a share, just 21 days from its upcoming earnings release on October 31, 2024.

Reinsurance Group's Earnings ESP sits at 0.92%, which, as explained above, is calculated by taking the percentage difference between the $5.17 Most Accurate Estimate and the Zacks Consensus Estimate of $5.12.

RGA is part of a big group of Finance stocks that boast a positive ESP, and investors may want to take a look at Palomar (PLMR) as well.

Palomar is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on November 6, 2024. PLMR's Most Accurate Estimate sits at $1.09 a share 27 days from its next earnings release.

For Palomar, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.09 is 0.16%.

RGA and PLMR'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 >>

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Reinsurance Group of America, Incorporated (RGA) : Free Stock Analysis Report

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