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Earnings Estimates Moving Higher for ArcBest (ARCB): Time to Buy?

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ArcBest (ARCB - Free Report) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.

Analysts' growing optimism on the earnings prospects of this freight transportation and logistics company 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. This insight is at the core of our stock rating tool -- the Zacks Rank.

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 ArcBest, 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

For the current quarter, the company is expected to earn $2.39 per share, which is a change of -2.45% from the year-ago reported number.

The Zacks Consensus Estimate for ArcBest has increased 56.89% over the last 30 days, as three estimates have gone higher compared to no negative revisions.

Current-Year Estimate Revisions

The company is expected to earn $7.56 per share for the full year, which represents a change of -44.66% from the prior-year number.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, five estimates have moved up for ArcBest versus no negative revisions. This has pushed the consensus estimate 17.3% higher.

Favorable Zacks Rank

The promising estimate revisions have helped ArcBest 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

Investors have been betting on ArcBest because of its solid estimate revisions, as evident from the stock's 10.8% 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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