GrafTech (EAF) Soars 13.7%: Is Further Upside Left in the Stock?
GrafTech International (EAF) shares soared 13.7% in the last trading session to close at $8.11. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 1.7% gain over the past four weeks.
GrafTech shares have been gaining since the company announced a strategic collaboration with Antora Energy to develop and supply carbon-based materials for its thermal batteries. This move boosts the domestic manufacturing base for American energy technology. The partnership will use a significant portion of the bake furnace capacity at GrafTech’s St. Marys facility, which the company acquired in 2010. Under this collaboration, GrafTech will unlock an important new application for the facility along with diversifying its end markets and supporting domestic energy storage supply chain growth.
This maker of graphite products is expected to post quarterly loss of $1.44 per share in its upcoming report, which represents a year-over-year change of -39.8%. Revenues are expected to be $126.98 million, down 11.8% from the year-ago quarter.
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 GrafTech, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on EAF 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 >>>>
GrafTech is part of the Zacks Metal Products - Procurement and Fabrication industry. Kaiser Aluminum (KALU), another stock in the same industry, closed the last trading session 1.6% higher at $152.38. KALU has returned -7% in the past month.
Kaiser's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $2.04. Compared to the company's year-ago EPS, this represents a change of +9.7%. Kaiser currently boasts a Zacks Rank of #1 (Strong Buy).
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This article originally published on Zacks Investment Research (zacks.com).
