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Imperial Oil (IMO) Soars 5.6%: Is Further Upside Left in the Stock?

Zacks Equity Research
·2 min read

Imperial Oil (IMO) shares ended the last trading session 5.6% higher at $24.03. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 0.4% gain over the past four weeks.

Imperial Oil has witnessed a surge in its stock price despite uncertainties in global fuel demand outlook. This reflects strong investor belief regarding the leading integrated energy player’s capabilities to sail through the pandemic-induced uncertainty in energy business courtesy of its very strong balance sheet. Few days back, Morgan Stanley analyst Benny Wong raised the stock’s price target. Prior to that, Goldman Sachs analyst Neil Mehta upgraded the company to Buy from Sell, reflecting increased optimism over the stock’s overall performance.

Price and Consensus

Price Consensus Chart for IMO
Price Consensus Chart for IMO

This oil and gas and petroleum products company is expected to post quarterly earnings of $0.37 per share in its upcoming report, which represents a year-over-year change of +640%. Revenues are expected to be $5.45 billion, up 9.3% from the year-ago quarter.

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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 Imperial Oil, the consensus EPS estimate for the quarter has been revised 54.2% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on IMO going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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Zacks Investment Research