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WSFS (WSFS) Moves 7.1% Higher: Will This Strength Last?

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WSFS Financial (WSFS - Free Report) shares rallied 7.1% in the last trading session to close at $54.36. 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 15.3% gain over the past four weeks.

Shares of WSFS Financial surged as encouraging inflation numbers and a rising unemployment rate are giving confidence to the Federal Reserve that prices will eventually come down toward the 2% target. So, market participants are predicting interest rate cuts as early as during the September FOMC meeting.

This is a positive development for finance stocks that have been reeling under the Fed’s aggressive monetary tightening. As the rates come down, so will banks’ funding costs. Also, demand for loans is expected to improve. Hence, the investors turned bullish on banking sector stocks, driving WSFS higher.

This bank holding company is expected to post quarterly earnings of $1.04 per share in its upcoming report, which represents a year-over-year change of -10.3%. Revenues are expected to be $254.54 million, up 2.3% 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 WSFS, the consensus EPS estimate for the quarter has been revised 1.4% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on WSFS 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 >>>>

WSFS belongs to the Zacks Financial - Savings and Loan industry. Another stock from the same industry, Flushing Financial (FFIC - Free Report) , closed the last trading session 5.3% higher at $15.30. Over the past month, FFIC has returned 20.5%.

Flushing Financial's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.18. Compared to the company's year-ago EPS, this represents a change of -30.8%. Flushing Financial currently boasts a Zacks Rank of #3 (Hold).


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