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PPD, Inc. (PPD) Soars 6.5%: Is Further Upside Left in the Stock?

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Zacks Equity Research
·2 min read
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PPD, Inc. (PPD) shares soared 6.5% in the last trading session to close at $45.80. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 2.5% gain over the past four weeks.

The stock recorded a strong price increase on optimism regarding its proposed selloff to Thermo Fisher Scientific. Per terms of the deal, Thermo Fisher will acquire PPD, Inc. for a total cash purchase price of $17.4 billion plus $3.5 billion of net debt. The deal is expected to bring both companies’ extensive capabilities and knowledge together in serving the pharma and biotech industry, which will enable new solutions for customers that create the potential to reduce the time and cost of the drug development process.

Price and Consensus

Price Consensus Chart for PPD
Price Consensus Chart for PPD

This company is expected to post quarterly earnings of $0.31 per share in its upcoming report, which represents a year-over-year change of +29.2%. Revenues are expected to be $1.29 billion, up 20.4% 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 PPD, Inc., the consensus EPS estimate for the quarter has been revised 0.6% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on PPD 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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