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Shares of Brookline Bancorp (BRKL) have been strong performers lately, with the stock up 11.8% over the past month. The stock hit a new 52-week high of $16.91 in the previous session. Brookline Bancorp has gained 40.4% since the start of the year compared to the 18.9% move for the Zacks Finance sector and the 32.2% return for the Zacks Financial - Savings and Loan industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on April 28, 2021, Brookline reported EPS of $0.34 versus consensus estimate of $0.28 while it beat the consensus revenue estimate by 1.89%.
For the current fiscal year, Brookline is expected to post earnings of $1.15 per share on $291.66 million in revenues. This represents a 98.28% change in EPS on a 2.41% change in revenues. For the next fiscal year, the company is expected to earn $1.2 per share on $298.55 million in revenues. This represents a year-over-year change of 4.35% and 2.36%, respectively.
Brookline may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Brookline has a Value Score of C. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 14.7X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 21.3X versus its peer group's average of 12.2X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Brookline currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Brookline meets the list of requirements. Thus, it seems as though Brookline shares could have a bit more room to run in the near term.
How Does Brookline Stack Up to the Competition?
Shares of Brookline have been rising, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also looking good, including Citizens Community Bancorp (CZWI), Waterstone Financial (WSBF), and Meta Financial Group (CASH), all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 15% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Brookline, even beyond its own solid fundamental situation.
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Brookline Bancorp, Inc. (BRKL) : Free Stock Analysis Report
Meta Financial Group, Inc. (CASH) : Free Stock Analysis Report
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Waterstone Financial, Inc. (WSBF) : Free Stock Analysis Report
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