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Earnings Estimates Moving Higher for Hanmi Financial (HAFC): Time to Buy?

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Hanmi Financial (HAFC - Free Report) 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 upward trend in estimate revisions for this bank holding company reflects growing optimism of analysts on its earnings prospects, 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 Hanmi Financial, 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 company is expected to earn $0.77 per share for the current quarter, which represents a year-over-year change of -10.47%.

Over the last 30 days, the Zacks Consensus Estimate for Hanmi Financial has increased 12.14% because three estimates have moved higher compared to no negative revisions.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $3.03 per share, representing a year-over-year change of -5.9%.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, four estimates have moved up for Hanmi Financial versus no negative revisions. This has pushed the consensus estimate 9.48% higher.

Favorable Zacks Rank

The promising estimate revisions have helped Hanmi Financial earn 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

Investors have been betting on Hanmi Financial because of its solid estimate revisions, as evident from the stock's 12% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.


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