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Byline Bancorp (BY) Surges 5.5%: Is This an Indication of Further Gains?

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Byline Bancorp (BY - Free Report) shares ended the last trading session 5.5% higher at $27.53. 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 14.7% gain over the past four weeks.

Shares of Byline Bancorp rallied for the seventh straight trading session and hit a 52-week high of $27.63. Encouraging inflation numbers and cooling employment data have increased the chances of the Federal Reserve cutting the interest rates as early as during the September FOMC meeting. As the rates come down, banks’ funding costs will stabilize or move lower eventually. Also, demand for loans is expected to improve. Hence, the investors turned bullish on banking sector stocks, driving BY higher.

This bank holding company is expected to post quarterly earnings of $0.63 per share in its upcoming report, which represents a year-over-year change of -13.7%. Revenues are expected to be $99.25 million, up 9.7% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Byline 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 BY 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 >>>>

Byline Bancorp is part of the Zacks Banks - Northeast industry. Valley National (VLY - Free Report) , another stock in the same industry, closed the last trading session 4.5% higher at $7.91. VLY has returned 12.3% in the past month.

Valley National's consensus EPS estimate for the upcoming report has changed -4.4% over the past month to $0.20. Compared to the company's year-ago EPS, this represents a change of -28.6%. Valley National currently boasts a Zacks Rank of #4 (Sell).


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