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Strength Seen in Stericycle (SRCL): Can Its 14.6% Jump Turn into More Strength?

Zacks Equity Research
·2-min read

Stericycle (SRCL) shares ended the last trading session 14.6% higher at $59.05. 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 11.6% gain over the past four weeks.

This increased investor optimism is linked to the news of the company's acquisition by Waste Management in a deal valued at around $7.2 billion, including nearly $1.4 billion in debt.

 

This medical waste management company is expected to post quarterly earnings of $0.57 per share in its upcoming report, which represents a year-over-year change of +32.6%. Revenues are expected to be $672.07 million, up 0.4% from the year-ago quarter.

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Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Stericycle, the consensus EPS estimate for the quarter has been revised marginally 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 SRCL 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 >>>>

Stericycle is part of the Zacks Waste Removal Services industry. Waste Management (WM), another stock in the same industry, closed the last trading session 4.5% lower at $201.30. WM has returned 1.4% in the past month.

For Waste Management , the consensus EPS estimate for the upcoming report has changed +0.7% over the past month to $1.81. This represents a change of +19.9% from what the company reported a year ago. Waste Management currently has a Zacks Rank of #3 (Hold).

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Stericycle, Inc. (SRCL) : Free Stock Analysis Report

Waste Management, Inc. (WM) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research