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Earnings Estimates Moving Higher for Core & Main (CNM): Time to Buy?

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Core & Main (CNM - 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.

Analysts' growing optimism on the earnings prospects of this distributor of water and fire protection products is driving estimates higher, 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 Core & Main, 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.

Current-Quarter Estimate Revisions

The company is expected to earn $0.65 per share for the current quarter, which represents a year-over-year change of -26.97%.

Over the last 30 days, two estimates have moved higher for Core & Main while one has gone lower. As a result, the Zacks Consensus Estimate has increased 7.18%.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $1.82 per share, representing a year-over-year change of -14.55%.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, one estimate has moved up for Core & Main versus no negative revisions. This has pushed the consensus estimate 6.56% higher.

Favorable Zacks Rank

The promising estimate revisions have helped Core & Main earn a Zacks Rank #2 (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

Core & Main shares have added 8% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.


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