- Oops!Something went wrong.Please try again later.
Asbury Automotive Group (ABG) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.
Analysts' growing optimism on the earnings prospects of this auto dealership chain is driving estimates higher, which 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 Asbury Automotive, 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.
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 $3.82 per share for the current quarter, which represents a year-over-year change of +63.95%.
The Zacks Consensus Estimate for Asbury Automotive has increased 6.9% over the last 30 days, as four estimates have gone higher compared to no negative revisions.
Current-Year Estimate Revisions
The company is expected to earn $11.57 per share for the full year, which represents a change of +22.3% from the prior-year number.
In terms of estimate revisions, the trend for the current year also appears quite encouraging for Asbury Automotive. Over the past month, four estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 10.28%.
Favorable Zacks Rank
The promising estimate revisions have helped Asbury Automotive earn 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.
While strong estimate revisions for Asbury Automotive have attracted decent investments and pushed the stock 21.8% 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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Asbury Automotive Group, Inc. (ABG) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research