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Tenneco (TEN) Surges 8.5%: Is This an Indication of Further Gains?

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Tenneco (TEN) shares rallied 8.5% in the last trading session to close at $11.35. 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 1.1% loss over the past four weeks.

Shares of Tenneco rallied yesterday following its impressive first-quarter 2021 results. Not only did the firm deliver a comprehensive beat, it also witnessed year-over-year growth in overall sales and earnings. While Tenneco's top line soared 23% year over year, it generated net profit of $65 million against loss of $839 million incurred in the comparable year-ago period. Investors were also encouraged as the firm raised its revenue and adjusted EBITDA projections for the ongoing year.

Price and Consensus

Price Consensus Chart for TEN
Price Consensus Chart for TEN

This auto parts maker is expected to post quarterly earnings of $0.71 per share in its upcoming report, which represents a year-over-year change of +329%. Revenues are expected to be $4.39 billion, up 14.6% 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 26.3% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate 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 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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