Summit Materials (SUM) Stock Jumps 6.5%: Will It Continue to Soar?
Summit Materials SUM shares ended the last trading session 6.5% higher at $33.83. 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 1.3% loss over the past four weeks.
This increase was prompted by the construction materials provider's submission of a preliminary statement to the Securities and Exchange Commission (SEC) outlining its proposed acquisition of equity interests in Argos USA, including Cementos Argos.
Summit has disclosed its plan to fund this acquisition through a combination of $1.2 billion in cash and the issuance of 54.7 million shares of Summit stock. Following the completion of this transaction, Summit's existing shareholders will retain approximately 69% ownership of the company, while the remaining stake will be held by Cementos Argos.
This construction materials producer is expected to post quarterly earnings of $0.74 per share in its upcoming report, which represents a year-over-year change of +5.7%. Revenues are expected to be $761.57 million, up 11% 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 Summit Materials, 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 SUM 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 >>>>
Summit Materials belongs to the Zacks Building Products - Concrete and Aggregates industry. Another stock from the same industry, Eagle Materials (EXP), closed the last trading session 1.2% lower at $157.36. Over the past month, EXP has returned -6.9%.
Eagle Materials' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $4.18. Compared to the company's year-ago EPS, this represents a change of +12.4%. Eagle Materials currently boasts a Zacks Rank of #3 (Hold).
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