Preferred Bank (PFBC) Soars 5.8%: Is Further Upside Left in the Stock?
Preferred Bank PFBC shares ended the last trading session 5.8% higher at $65.22. 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 0.2% gain over the past four weeks.
The impact of the eleven interest rate hikes since March 2022 (announced by the Federal Reserve) has been seen from the cooling inflation. Thus, there are expectations that the Fed will not raise rates any further this year, which is a positive for banks in the United States. In fact, there are chances that the Fed might cut rates next year. Hence, investor optimism over the stop in rate hikes is likely to have driven the PFBC stock higher in last day’s trading session.
This independent commercial bank is expected to post quarterly earnings of $2.54 per share in its upcoming report, which represents a year-over-year change of -6.3%. Revenues are expected to be $72.84 million, down 5.3% 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 Preferred Bank, 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 PFBC 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 >>>>
Preferred Bank is a member of the Zacks Banks - West industry. One other stock in the same industry, Westamerica WABC, finished the last trading session 3.3% higher at $52.38. WABC has returned 5% over the past month.
For Westamerica , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.50. This represents a change of +2.7% from what the company reported a year ago. Westamerica currently has a Zacks Rank of #1 (Strong Buy).
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