Surging Earnings Estimates Signal Upside for Bausch + Lomb (BLCO) Stock
Bausch + Lomb (BLCO) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.
The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this company, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
For Bausch + Lomb, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.
Current-Quarter Estimate Revisions
For the current quarter, the company is expected to earn $0.08 per share, which is a change of -20% from the year-ago reported number.
The Zacks Consensus Estimate for Bausch + Lomb has increased 6.09% over the last 30 days, as three estimates have gone higher while one has gone lower.
Current-Year Estimate Revisions
For the full year, the company is expected to earn $0.65 per share, representing a year-over-year change of -10.96%.
The revisions trend for the current year also appears quite promising for Bausch + Lomb, with five estimates moving higher over the past month compared to two negative revisions. The consensus estimate has also received a boost over this time frame, increasing 8.49%.
Favorable Zacks Rank
The promising estimate revisions have helped Bausch + Lomb earn a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
Bottom Line
Investors have been betting on Bausch + Lomb because of its solid estimate revisions, as evident from the stock's 8.4% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.
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Bausch + Lomb Corporation (BLCO) : Free Stock Analysis Report
