Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.

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.

The final step today is to look at a stock that meets our ESP qualifications. Walmart (WMT) earns a Zacks Rank #3 nine days from its next quarterly earnings release on May 16, 2024, and its Most Accurate Estimate comes in at $0.53 a share.

Walmart's Earnings ESP sits at 1.65%, which, as explained above, is calculated by taking the percentage difference between the $0.53 Most Accurate Estimate and the Zacks Consensus Estimate of $0.52.

WMT is just one of a large group of Retail-Wholesale stocks with a positive ESP figure. Walgreens Boots Alliance (WBA) is another qualifying stock you may want to consider.

Walgreens Boots Alliance, which is readying to report earnings on June 25, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.70 a share, and WBA is 49 days out from its next earnings report.

Walgreens Boots Alliance's Earnings ESP figure currently stands at 2.75% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.68.

WMT and WBA's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

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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Walmart Inc. (WMT) : Free Stock Analysis Report

Walgreens Boots Alliance, Inc. (WBA) : Free Stock Analysis Report

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