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Bull of the Day: E*Trade (ETFC)

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The tax cut has the stock market going supernova. Yesterday was the first time in history the Dow closed over 26,000. There is no other industry that is cheering on this market rally more than financial services. More trading and higher asset prices spells big profits for companies like today’s Bull of the Day, E*Trade Financial (ETFC - Free Report) .

E*Trade Financial Corporation, a financial services company, provides brokerage and related products and services primarily to individual retail investors under the E*Trade Financial brand. It also offers investor-focused banking products, primarily deposits to retail investors; and financial corporate services, such as software and services for managing equity compensation plans to its corporate clients. 

The company is a Zacks Rank #1 (Strong Buy) in an industry that ranks in the Top 11% of our Zacks Industry Rank. The reason for the bullish Zacks Rank is the activity of analysts covering the stock. Over the last month, six analysts have increased their earnings estimates for the current quarter, current year and next year while no analysts have dropped their numbers.

This has pushed the Zacks Consensus Estimate for the current year from $2.26 to $2.28, while next year’s number has swelled from $2.52 to $3.11. Earnings are estimated to grow at a 44% clip year-over-year this quarter. Next year analysts are betting on 36.42% earnings growth. Revenues for next year are slated to grow at 12.12%.

One quick look at the stock chart and you see the market’s reaction to the bullish estimate revisions. The last time ETFC traded below its 50-day moving average for any extended period of time was last Spring when shares floundered in the mid-$30s. Since then, it’s been a moonshot, with shares bouncing off the 50-day in September and November, propelling the stock up to $54. The last bit of congestion was at the $50 level.

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