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Can Farmers & Merchants Bancorp Inc. (FMAO) Run Higher on Rising Earnings Estimates?

Zacks Equity Research
·2 min read

Farmers & Merchants Bancorp Inc. (FMAO) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.

The upward trend in estimate revisions for this company reflects growing optimism of analysts on its earnings prospects, 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 Farmers & Merchants Bancorp Inc. 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.

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Current-Quarter Estimate Revisions

The earnings estimate of $0.62 per share for the current quarter represents a change of +19.23% from the number reported a year ago.

Over the last 30 days, two estimates have moved higher for Farmers & Merchants Bancorp Inc. compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 8.85%.

Current-Year Estimate Revisions

The company is expected to earn $2.51 per share for the full year, which represents a change of +10.09% from the prior-year 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 Farmers & Merchants Bancorp Inc. versus no negative revisions. This has pushed the consensus estimate 5.32% higher.

Favorable Zacks Rank

The promising estimate revisions have helped Farmers & Merchants Bancorp Inc. earn a Zacks Rank #2 (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.

Bottom Line

Farmers & Merchants Bancorp Inc. shares have added 5.9% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.


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