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Earnings Estimates Moving Higher for Sierra Bancorp (BSRR): Time to Buy?

Sierra Bancorp (BSRR) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.

The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this parent company of Bank of the Sierra, 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 Sierra Bancorp, 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.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

For the current quarter, the company is expected to earn $0.49 per share, which is a change of -15.52% from the year-ago reported number.

The Zacks Consensus Estimate for Sierra Bancorp has increased 11.64% over the last 30 days, as one estimate has gone higher while one has gone lower.

Current-Year Estimate Revisions

For the full year, the earnings estimate of $2 per share represents a change of -14.16% from the year-ago number.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, three estimates have moved up for Sierra Bancorp versus one negative revision. This has pushed the consensus estimate 10.07% higher.

Favorable Zacks Rank

Thanks to promising estimate revisions, Sierra Bancorp currently carries a Zacks Rank #1 (Strong 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

While strong estimate revisions for Sierra Bancorp have attracted decent investments and pushed the stock 9.4% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.


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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.

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Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

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