LSB (LXU) Moves 13.2% Higher: Will This Strength Last?

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This story originally appeared on Zacks

LSB (LXU) shares ended the last trading session 13.2% higher at $ 12.67. 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 2.9% gain over the past four weeks.

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LXU’s shares are heading higher in anticipation of strong fourth-quarter results. The company’s results are expected to be driven by strong demand and pricing for its agricultural and industrial products. Its fourth-quarter results are expected to reflect the benefits of robust demand and a rally in prices for fertilizers. Strong demand from key end markets including homebuilding and power generation is also expected to drive results in its industrial business.

This chemical maker is expected to post quarterly earnings of $ 0.37 per share in its upcoming report, which represents a year-over-year change of + 145.1%. Revenues are expected to be $ 180.1 million, up 102.6% 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 LSB, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock’s price usually does not keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on LXU 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 >>>>

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