Ashland (ASH) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.
Analysts' growing optimism on the earnings prospects of this chemical company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
Consensus earnings estimates for the next quarter and full year have moved considerably higher for Ashland, as there has been strong agreement among the covering analysts in raising estimates.
Current-Quarter Estimate Revisions
The earnings estimate of $1.40 per share for the current quarter represents a change of +14.75% from the number reported a year ago.
The Zacks Consensus Estimate for Ashland has increased 6.49% over the last 30 days, as three estimates have gone higher while three have gone lower.
Current-Year Estimate Revisions
For the full year, the earnings estimate of $5.66 per share represents a change of +50.93% from the year-ago number.
There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, six estimates have moved up for Ashland versus no negative revisions. This has pushed the consensus estimate 12.12% higher.
Favorable Zacks Rank
Thanks to promising estimate revisions, Ashland currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
While strong estimate revisions for Ashland have attracted decent investments and pushed the stock 6.3% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.
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Ashland Inc. (ASH) : Free Stock Analysis Report
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