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Strength Seen in Essa Bancorp (ESSA): Can Its 7.2% Jump Turn into More Strength?

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Essa Bancorp (ESSA - Free Report) shares ended the last trading session 7.2% higher at $18.44. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 7.7% loss over the past four weeks.

After getting hammered because of industry-wide concern related to commercial real estate (CRE) loans, shares of Essa Bancorp are showing signs of improvement. Given the company’s notable CRE loan exposure, the Federal Reserve’s signal of rate cuts later this year seem to have turned investors bullish on the ESSA stock.

This bank is expected to post quarterly earnings of $0.35 per share in its upcoming report, which represents a year-over-year change of -27.1%. Revenues are expected to be $16.29 million, down 5.2% 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 Essa Bancorp, 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 ESSA 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 >>>>

Essa Bancorp belongs to the Zacks Financial - Savings and Loan industry. Another stock from the same industry, OceanFirst Financial (OCFC - Free Report) , closed the last trading session 2% higher at $15.01. Over the past month, OCFC has returned -8.4%.

For OceanFirst, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.42. This represents a change of -23.6% from what the company reported a year ago. OceanFirst currently has a Zacks Rank of #3 (Hold).


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