Rising earnings estimates for US Steel (X): will it win?
Unted States Steel (X) could be a solid addition to your portfolio given a noticeable revision in the company’s earnings estimates. Although the stock has gained in recent times, the trend may continue as its earnings outlook continues to improve.
The upward trend in estimate revisions, which stems from growing analyst optimism about the steelmaker’s earnings outlook, should be reflected in its share price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and short-term stock price movements. Our stock rating tool – the Zacks Rank – is mostly built on this idea.
The five-tier Zacks ranking system, which ranges from a Zacks # 1 (strong buy) to a Zacks # 5 (strong sell) ranking, has an impressive record of externally audited outperformance, with stocks ranked Zacks # 1 generating an average annual return of + 25% since 2008.
Consensus earnings estimates for the next quarter and full year have risen significantly for US Steel, as there has been strong agreement among coverage analysts to increase the estimates.
The graph below shows the evolution of the EPS estimate of the Zacks Consensus at 12 months:
12 month EPS
Revisions to estimates for the current quarter
The earnings estimate of $ 2.92 per share for the current quarter represents a change of + 209.36% from the number reported a year ago.
Zacks’ consensus estimate for US Steel has risen 7.06% in the past 30 days as two estimates have risen from no negative revisions.
Revisions to estimates for the current year
For the full year, the company is expected to earn $ 8.62 per share, which is a year-over-year change of + 284.58%.
The trend in revisions for the current year also looks very promising for US Steel, with two estimates rising in the past month from no negative revisions. The consensus estimate also received a boost during this period, rising 25.88%.
Favorable Zacks Rank
The promising estimate revisions helped US Steel achieve a Zacks Rank # 1 (Strong Buy). Zacks Rank is a proven scoring tool that helps investors effectively harness the power of earnings estimate reviews and make the right investment decision. You can see the full list of Zacks # 1 Rank (Strong Buy) stocks today here.
Our research shows that stocks with Zacks rank 1 (strong buy) and 2 (buy) significantly outperform the S&P 500.
While sharp revisions to estimates for US Steel have attracted decent investment and pushed the stock 6.1% higher in the past four weeks, a further rise can still be left for the stock. So you can consider adding it to your portfolio immediately.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.