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Signet (SIG) Stock Jumps 7.9%: Will It Continue to Soar?

·2 min read

Signet (SIG) shares soared 7.9% in the last trading session to close at $65.92. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 4.4% gain over the past four weeks.

Shares of Signet got a boost following the company’s upbeat guidance for first-quarter and fiscal 2022. Management highlighted that strategic endeavors coupled with gains from stimulus, tax refunds and consumer enthusiasm on vaccine rollouts are acting as tailwinds. Moreover, the company has witnessed better-than-expected conversion and average ticket values in the first quarter.

Incidentally, the company now projects total revenues in the bracket of $1.57-$1.60 billion and same-store sales of 97-99% for the fiscal first quarter. It currently anticipates adjusted operating income of $85-$100 million for the same quarter. Management had earlier guided revenues of $1.42-$1.46 billion and same-store sales of 80-84% for the fiscal first quarter. Adjusted operating income was earlier envisioned at $40-$60 million.

For fiscal 2022, Signet now forecasts total revenues in the band of $6-$6.14 billion and same-store sales of 17-20%, while adjusted operating income is estimated at $335-$364 million. Earlier, management had guided revenues of $5.85-$6 billion, same-store sales of 14-17% and adjusted operating income of $290-$324 million for the same fiscal.

Price and Consensus

Price Consensus Chart for SIG
Price Consensus Chart for SIG

This jewelry company is expected to post quarterly earnings of $0.58 per share in its upcoming report, which represents a year-over-year change of +136.5%. Revenues are expected to be $1.46 billion, up 71% 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 Signet, the consensus EPS estimate for the quarter has been revised 252.6% 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 SIG 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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