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Tenneco (TEN) Soars 5.5%: Is Further Upside Left in the Stock?

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Tenneco (TEN) shares rallied 5.5% in the last trading session to close at $15.42. 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 36% gain over the past four weeks.

Tenneco’s sharpened focus on innovation and quality to meet the changing dynamics of the auto industry is driving the stock higher. The firm’s emissions-control products optimize engine performance and meet the stringent air-quality legislations amid the heightening climate concerns. Buyout of Ohlins has expanded Tenneco’s product offerings and accelerated the development of advanced original equipment intelligent suspension solutions. The company’s cost-containment efforts under Accelerate+ program, disciplined capex reductions and optimization of portfolio are also buoying investors’ optimism.

Price and Consensus

Price Consensus Chart for TEN
Price Consensus Chart for TEN

This auto parts maker is expected to post quarterly earnings of $0.69 per share in its upcoming report, which represents a year-over-year change of +132.1%. Revenues are expected to be $4.44 billion, up 68.3% 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 Tenneco, the consensus EPS estimate for the quarter has been revised 8.5% 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 TEN 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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