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Patterson Companies (PDCO) Soars 6%: Is Further Upside Left in the Stock?

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Patterson Companies (PDCO) shares rallied 6% in the last trading session to close at $35.44. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 3.8% gain over the past four weeks.

Patterson Companies witnessed solid price appreciation driven by the optimism surrounding the announcement of the company’s subsidiary, Patterson Veterinary Supply, Inc., entering into an agreement to acquire substantially all of the assets of Miller Vet Holdings, LLC. Post completion of the buyout, the transaction is projected to boost Patterson Animal Health’s footprint in the companion animal market, enhance increased operating leverage and attractive synergies.

Price and Consensus

Price Consensus Chart for PDCO
Price Consensus Chart for PDCO

This medical supplies maker is expected to post quarterly earnings of $0.53 per share in its upcoming report, which represents a year-over-year change of +23.3%. Revenues are expected to be $1.54 billion, up 19.8% 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 Patterson Companies, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on PDCO going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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