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Stepan Co. (SCL) Moves 4.1% Higher: Will This Strength Last?

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Stepan Co. (SCL - Free Report) shares rallied 4.1% in the last trading session to close at $102.10. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 10.7% loss over the past four weeks.

Optimism over demand strength across Surfactant and Polymer units is driving the stock higher. SCL is seeing higher demand for Surfactants in the agricultural and oilfield markets and increasing institutional cleaning volumes on the back of the reopening of economies globally. The acquisition of INVISTA's aromatic polyester polyol business is also driving volumes in its Polymer business. The business is also benefiting from a rebound from pandemic-related delays of re-roofing and new construction projects.

This specialty chemicals company is expected to post quarterly earnings of $1.90 per share in its upcoming report, which represents a year-over-year change of +5%. Revenues are expected to be $693.13 million, up 16.4% 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 Stepan Co., 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 SCL 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 >>>>

Stepan Co. belongs to the Zacks Chemical - Diversified industry. Another stock from the same industry, Albemarle (ALB - Free Report) , closed the last trading session 5.2% higher at $224.79. Over the past month, ALB has returned -16.2%.

For Albemarle, the consensus EPS estimate for the upcoming report has changed -0.5% over the past month to $2.79. This represents a change of +213.5% from what the company reported a year ago. Albemarle currently has a Zacks Rank of #1 (Strong Buy).


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