Cullen/Frost (CFR) Soars 4.0%: Is Further Upside Left in the Stock?
Cullen/Frost Bankers (CFR) shares ended the last trading session 4% higher at $110.44. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 7.5% gain over the past four weeks.
After 11 interest rate hikes, the Fed's decision to pause rate hikes for the third month drove bullish sentiments across markets amid the optimism of easing inflation pressures. With this, the interest rates remain at a 22-year high of 5.25-5.5%. Further, the central bank indicated three interest rate cuts by 2024-end. These developments turned investor sentiment bullish on bank stocks, as high funding costs faced by the industry players are expected to decline in the next year, supporting spread income and margins. Hence, the CFR stock gained.
This financial holding company is expected to post quarterly earnings of $2.06 per share in its upcoming report, which represents a year-over-year change of -29.2%. Revenues are expected to be $493.79 million, down 6.8% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Cullen/Frost, the consensus EPS estimate for the quarter has been revised 1.2% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on CFR 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 >>>>
Cullen/Frost is a member of the Zacks Banks - Southwest industry. One other stock in the same industry, First Foundation (FFWM), finished the last trading session 11.4% higher at $9.02. FFWM has returned 28.2% over the past month.
First Foundation's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.02. Compared to the company's year-ago EPS, this represents a change of -94.3%. First Foundation currently boasts a Zacks Rank of #4 (Sell).
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Cullen/Frost Bankers, Inc. (CFR) : Free Stock Analysis Report
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