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Esab (ESAB) Surges 6.0%: Is This an Indication of Further Gains?

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Esab (ESAB - Free Report) shares rallied 6% in the last trading session to close at $72.42. 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 0.5% gain over the past four weeks.

Esab’s shares have gained as an analyst at Bank of America Securities has upgraded the stock’s rating from Neutral to Buy. The target price has also been raised from $61 to $89. The revised target price suggests a 30% upside from its current price.

This maker of welding and cutting equipment is expected to post quarterly earnings of $0.92 per share in its upcoming report, which represents no change from the year-ago quarter. Revenues are expected to be $632.64 million, up 2% 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 Esab, 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 ESAB going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Esab is a member of the Zacks Metal Products - Procurement and Fabrication industry. One other stock in the same industry, Kaiser Aluminum (KALU - Free Report) , finished the last trading session 2% lower at $75.79. KALU has returned 1.2% over the past month.

For Kaiser, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.40. This represents a change of +150% from what the company reported a year ago. Kaiser currently has a Zacks Rank of #3 (Hold).


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