Earnings Estimates Moving Higher for S&T Bancorp (STBA): Time to Buy?
S&T Bancorp (STBA) 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 holding company for S&T Bank 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 S&T Bancorp, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates 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
For the current quarter, the company is expected to earn $0.98 per share, which is a change of +30.67% from the year-ago reported number.
Over the last 30 days, the Zacks Consensus Estimate for S&T Bancorp has increased 14.23% because two estimates have moved higher compared to no negative revisions.
Current-Year Estimate Revisions
For the full year, the earnings estimate of $3.52 per share represents a change of +1.73% from the year-ago number.
There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, two estimates have moved up for S&T Bancorp versus no negative revisions. This has pushed the consensus estimate 6.52% higher.
Favorable Zacks Rank
The promising estimate revisions have helped S&T Bancorp 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.
Investors have been betting on S&T Bancorp because of its solid estimate revisions, as evident from the stock's 6.9% 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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