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El Pollo Loco (LOCO) Surges 15.7%: Is This an Indication of Further Gains?

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El Pollo Loco Holdings (LOCO - Free Report) shares rallied 15.7% in the last trading session to close at $10.53. 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 2.7% gain over the past four weeks.

Shares of El Pollo Loco Holdings appreciated after news that its board of directors has approved a special dividend of $1.50 per share as well as a $20 million share repurchase program.

This Tex-Mex fast food chain is expected to post quarterly earnings of $0.12 per share in its upcoming report, which represents a year-over-year change of -55.6%. Revenues are expected to be $116.72 million, up 0.9% 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 El Pollo Loco, 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 LOCO 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 >>>>

El Pollo Loco is a member of the Zacks Retail - Restaurants industry. One other stock in the same industry, Carrols Restaurant Group , finished the last trading session 3.8% lower at $1.53. TAST has returned -25.4% over the past month.

For Carrols Restaurant, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.19. This represents a change of -18.8% from what the company reported a year ago. Carrols Restaurant currently has a Zacks Rank of #3 (Hold).


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