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UGI (UGI) Soars to 52-Week High, Time to Cash Out?
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Shares of UGI (UGI - Free Report) have been strong performers lately, with the stock up 2.1% over the past month. The stock hit a new 52-week high of $47 in the previous session. UGI has gained 33.2% since the start of the year compared to the 4.8% move for the Zacks Utilities sector and the 19.7% return for the Zacks Utility - Gas Distribution industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 5, 2021, UGI reported EPS of $1.99 versus consensus estimate of $1.72.
Valuation Metrics
While UGI has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
UGI has a Value Score of B. The stock's Growth and Momentum Scores are C and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 15.6X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 9.3X versus its peer group's average of 10X. Additionally, the stock has a PEG ratio of 1.94. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, UGI currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if UGI meets the list of requirements. Thus, it seems as though UGI shares could still be poised for more gains ahead.
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UGI (UGI) Soars to 52-Week High, Time to Cash Out?
Shares of UGI (UGI - Free Report) have been strong performers lately, with the stock up 2.1% over the past month. The stock hit a new 52-week high of $47 in the previous session. UGI has gained 33.2% since the start of the year compared to the 4.8% move for the Zacks Utilities sector and the 19.7% return for the Zacks Utility - Gas Distribution industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 5, 2021, UGI reported EPS of $1.99 versus consensus estimate of $1.72.
Valuation Metrics
While UGI has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
UGI has a Value Score of B. The stock's Growth and Momentum Scores are C and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 15.6X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 9.3X versus its peer group's average of 10X. Additionally, the stock has a PEG ratio of 1.94. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, UGI currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if UGI meets the list of requirements. Thus, it seems as though UGI shares could still be poised for more gains ahead.