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Can Diamond S Shipping Inc. (DSSI) Run Higher on Rising Earnings Estimates?

Zacks Equity Research
·3 min read

Diamond S Shipping Inc. (DSSI) 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.

The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this company, 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. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.

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 Diamond S Shipping Inc. As there has been strong agreement among the covering analysts in raising estimates.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The company is expected to earn $1.43 per share for the current quarter, which represents a year-over-year change of +780.95%.

The Zacks Consensus Estimate for Diamond S Shipping Inc. has increased 49.48% over the last 30 days, as one estimate has gone higher compared to no negative revisions.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $4.65 per share, representing a year-over-year change of +1191.67%.

The revisions trend for the current year also appears quite promising for Diamond S Shipping Inc. with one estimate moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 11.15%.

Favorable Zacks Rank

The promising estimate revisions have helped Diamond S Shipping Inc. earn 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.

Bottom Line

While strong estimate revisions for Diamond S Shipping Inc. have attracted decent investments and pushed the stock 5.7% 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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