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.

The earnings figure itself is key, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb even higher.

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. Trane Technologies (TT) earns a Zacks Rank #2 right now and its Most Accurate Estimate sits at $3.27 a share, just six days from its upcoming earnings release on October 30, 2024.

By taking the percentage difference between the $3.27 Most Accurate Estimate and the $3.23 Zacks Consensus Estimate, Trane Technologies has an Earnings ESP of 1.17%.

TT is part of a big group of Business Services stocks that boast a positive ESP, and investors may want to take a look at Visa (V) as well.

Visa is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on October 29, 2024. V's Most Accurate Estimate sits at $2.58 a share five days from its next earnings release.

Visa's Earnings ESP figure currently stands at 0.14% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.58.

TT and V'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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Trane Technologies plc (TT) : Free Stock Analysis Report