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Oceaneering International (OII) Surges 18.2%: Is This an Indication of Further Gains?

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Oceaneering International (OII) shares ended the last trading session 18.2% higher at $13.91. 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 1.3% gain over the past four weeks.

Oceaneering International extended its rally for the third straight day, driven by optimism over rising commodity prices spurred by vaccine-related developments, accelerating economic growth and an improving demand picture. The recently announced first-quarter results also had a strong positive effect on the stock price. Last week, the supplier of offshore equipment and technology solutions to the energy industry not only reported better-than-expected earnings and revenues but also bumped up the midpoint of its 2021 EBITDA guidance. Further, an improving macro environment for energy and robust results helped it win an upgrade to Buy from Neutral at BofA Securities with a higher price target.

Price and Consensus

Price Consensus Chart for OII
Price Consensus Chart for OII

This oilfield services company is expected to post quarterly loss of $0.02 per share in its upcoming report, which represents a year-over-year change of +85.7%. Revenues are expected to be $449.35 million, up 5.2% 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 Oceaneering International, the consensus EPS estimate for the quarter has been revised 80.6% 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 OII 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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