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Falling Earnings Estimates Signal Weakness Ahead for Eldorado (EGO)

Zacks Equity Research
Updated

Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.

One such stock that you may want to consider dropping is Eldorado Gold Corporation EGO, which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #4 (Sell) further confirms weakness in EGO.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen two estimates moving down in the past 30 days, compared with no upward revisions. This trend has caused the consensus estimate to trend lower, going from 14 cents a share a month ago to its current level of 12 cents.

Also, for the current quarter, Eldorado has seen consensus estimate go down to 3 cents a share from 5 cents over the past 30 days.  

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The stock also has seen some pretty dismal trading lately, as the share price has dropped 23.4% in the past month.

Eldorado Gold Corporation Price and Consensus

 

Eldorado Gold Corporation Price and Consensus | Eldorado Gold Corporation Quote

So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t have a long time horizon to wait.

If you are still interested in the Basic Materials sector, you may instead consider a better-ranked stock - Aperam APEMY. The stock currently holds a Zacks Rank #1 (Strong Buy) and may be a better selection at this time. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Eldorado Gold Corporation (EGO): Free Stock Analysis Report
 
Aperam (APEMY): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research