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Will S&T Bancorp (STBA) Gain on Rising Earnings Estimates?

·3 min read

Investors might want to bet on S&T Bancorp (STBA), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.

The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this holding company for S&T Bank, 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. This insight is at the core of our stock rating tool -- the Zacks Rank.

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.

Consensus earnings estimates for the next quarter and full year have moved considerably higher for S&T Bancorp, as there has been strong agreement among the covering analysts in raising estimates.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The company is expected to earn $0.82 per share for the current quarter, which represents a year-over-year change of +17.14%.

The Zacks Consensus Estimate for S&T Bancorp has increased 24.43% over the last 30 days, as one estimate has gone higher compared to no negative revisions.

Current-Year Estimate Revisions

The company is expected to earn $2.89 per share for the full year, which represents a change of +2.85% from the prior-year number.

The revisions trend for the current year also appears quite promising for S&T Bancorp, with one estimate moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 5.38%.

Favorable Zacks Rank

Thanks to promising estimate revisions, S&T Bancorp currently carries a Zacks Rank #1 (Strong 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

While strong estimate revisions for S&T Bancorp have attracted decent investments and pushed the stock 6.9% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.


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