Strength Seen in Bunge (BG): Can Its 14.5% Jump Turn into More Strength?

·2 min read

Bunge (BG) shares soared 14.5% in the last trading session to close at $104.62. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 7% loss over the past four weeks.

Bunge shares have gained following the announcement that it will replace Signature Bank SBNY in the S&P 500. The change is effective prior to the opening of trading on Mar 15.

Also, in a separate development, Bunge, Corteva Inc. CTVA and Chevron U.S.A. Inc, a subsidiary of Chevron Corporation CVX, have joined forces to introduce proprietary winter canola hybrids that yield plant-based oil with a reduced carbon profile. The aim is to increase the availability of vegetable oil feedstocks primarily for the growing domestic renewable fuels market.

This agribusiness and food company is expected to post quarterly earnings of $3.44 per share in its upcoming report, which represents a year-over-year change of -19.3%. Revenues are expected to be $14.73 billion, down 7.2% 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 Bunge, 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 BG 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 >>>>

Bunge belongs to the Zacks Agriculture - Products industry. Another stock from the same industry, The Andersons (ANDE), closed the last trading session 2.5% higher at $41.02. Over the past month, ANDE has returned 4.4%.

For Andersons , the consensus EPS estimate for the upcoming report has changed -22.7% over the past month to $0.17. This represents a change of -5.6% from what the company reported a year ago. Andersons currently has a Zacks Rank of #3 (Hold).

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