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Strength Seen in TravelCenters (TA): Can Its 70.8% Jump Turn into More Strength?

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TravelCenters of America shares rallied 70.8% in the last trading session to close at $84.43. 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 8.1% gain over the past four weeks.

Recent news of TravelCenters of America’s merger agreement with BP has send the stock soaring. Per the deal, BP will acquire all outstanding shares of TravelCenters common stock for $86.00 per share in cash. This move is in sync with its turnaround and strategic plans. Moving on, TA has been implementing transformational initiatives in fuel including expanding its new private label card program and the development of an artificial intelligence platform to support diesel street pricing.

This truck-stop operator is expected to post quarterly earnings of $1.12 per share in its upcoming report, which represents a year-over-year change of +25.8%. Revenues are expected to be $2.53 billion, up 24.4% 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 TravelCenters, 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 TA 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 >>>>

TravelCenters is part of the Zacks Retail - Convenience Stores industry. Casey's General Stores (CASY - Free Report) , another stock in the same industry, closed the last trading session 1.3% lower at $220.55. CASY has returned -2.2% in the past month.

For Casey's, the consensus EPS estimate for the upcoming report has changed +2.5% over the past month to $1.67. This represents a change of -2.3% from what the company reported a year ago. Casey's currently has a Zacks Rank of #3 (Hold).


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