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Altra Industrial Motion (AIMC) Moves 6.5% Higher: Will This Strength Last?

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Altra Industrial Motion Corp. (AIMC) shares rallied 6.5% in the last trading session to close at $62.83. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 12.1% gain over the past four weeks.

Altra Industrial recorded solid price appreciation, courtesy of its encouraging first-quarter 2021 results, wherein adjusted earnings and revenues surpassed the Zacks Consensus Estimate by 13.2% and 3.1%, respectively. For 2021, the company increased its financial projections, backed by healthy orders, improved visibility and strengthening markets. Sales are now projected to be $1,820-$1,850 million, higher than $1,790-$1,830 million mentioned earlier. Non-GAAP earnings are expected to be $3.09-$3.24, up from the previously projected $2.95-$3.15.

Price and Consensus

Price Consensus Chart for AIMC
Price Consensus Chart for AIMC

This industrial products company is expected to post quarterly earnings of $0.77 per share in its upcoming report, which represents a year-over-year change of +28.3%. Revenues are expected to be $454.66 million, up 13.4% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Altra, the consensus EPS estimate for the quarter has been revised 1.7% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on AIMC going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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