SiteOne Landscape (SITE) shares rallied 3.1% in the last trading session to close at $172.51. 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 5.9% loss over the past four weeks.
SiteOne Landscape stock gained after an analyst at Berenberg Bank upgraded the rating on the company from a Hold to Buy and provided a price target of $207.00. The target price indicates a potential upside of 24% from its previous closing price of $167.26 on May 18.
SiteOne recently announced the acquisition of Rock & Block Hardscape Supply, marking its fifth for this year. Notably, Rock & Block Hardscape Supply serves the San Diego, Southern Orange County and Inland Empire markets in California with two locations focused on the distribution of hardscapes, masonry, and landscape supplies. This buyout will help SiteOne expand its existing hardscapes presence in Southern California and will aid in its mission to be the best full-line distributor to landscape professionals in all major U.S. and Canadian markets.
The distributor of landscape supplies reported impressive first-quarter 2021 results with net sales improving 41% year over year to $650.2 million. The company is witnessing robust market demand as end customers continue to invest in their outdoor living spaces. Earnings per share was 16 cents, marking a turnaround from a loss of 42 cents in the last-year quarter. The company anticipates the underlying market trends to remain positive this year. It expects adjusted EBITDA for 2021 in the range of $300 million to $320 million, representing year-over-year growth of 15% to 23%.
Price and Consensus
This company is expected to post quarterly earnings of $2.28 per share in its upcoming report, which represents a year-over-year change of +24.6%. Revenues are expected to be $1.01 billion, up 23.2% 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 SiteOne Landscape, the consensus EPS estimate for the quarter has been revised 6.4% 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 SITE going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
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