Yahoo Finance Element Solutions (ESI) Soars 13.6%: Is Further Upside Left in the Stock?
Element Solutions (ESI) shares ended the last trading session 13.6% higher at $26.95. 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 0.2% gain over the past four weeks.
ESI’s stock popped after the company raised its guidance for the second quarter and full-year 2024. The company now anticipates adjusted EBITDA to be approximately $135 million for the second quarter, up from $125 million expected earlier. Despite a generally weaker industrial environment, the company expects to achieve record adjusted EBITDA in 2024. It has increased its full-year 2024 adjusted EBITDA forecast to $530-$545 million from the prior view of $515-$530 million. ESI noted that the electronics business remains strong, with profitability improving and accelerating in some areas during the second quarter.
This specialty chemical and printing products is expected to post quarterly earnings of $0.33 per share in its upcoming report, which represents a year-over-year change of +6.5%. Revenues are expected to be $606.6 million, up 3.5% from the year-ago quarter.
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 Element Solutions, the consensus EPS estimate for the quarter has been revised 2.9% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on ESI going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Element Solutions is a member of the Zacks Chemical - Specialty industry. One other stock in the same industry, Westlake Chemical Partners (WLKP), finished the last trading session 0.2% lower at $22.53. WLKP has returned 1.6% over the past month.
Westlake Chemical Partners' consensus EPS estimate for the upcoming report has changed +2.3% over the past month to $0.45. Compared to the company's year-ago EPS, this represents a change of +32.4%. Westlake Chemical Partners currently boasts a Zacks Rank of #4 (Sell).
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