Why B2Gold (BTG) Might be Well Poised for a Surge
Investors might want to bet on B2Gold (BTG), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.
Analysts' growing optimism on the earnings prospects of this gold, silver and copper miner is driving estimates higher, which 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 -- has this insight at its core.
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 B2Gold, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher 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
The earnings estimate of $0.14 per share for the current quarter represents a change of +180% from the number reported a year ago.
Over the last 30 days, two estimates have moved higher for B2Gold compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 7.69%.
Current-Year Estimate Revisions
For the full year, the earnings estimate of $0.50 per share represents a change of +257.14% from the year-ago number.
In terms of estimate revisions, the trend for the current year also appears quite encouraging for B2Gold. Over the past month, four estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 6.44%.
Favorable Zacks Rank
The promising estimate revisions have helped B2Gold earn a Zacks Rank #2 (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.
While strong estimate revisions for B2Gold have attracted decent investments and pushed the stock 20.4% 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.