The Bancorp (TBBK - Free Report) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.
Analysts' growing optimism on the earnings prospects of this holding company for The Bancorp Bank is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
Consensus earnings estimates for the next quarter and full year have moved considerably higher for The Bancorp, as there has been strong agreement among the covering analysts in raising estimates.
The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:
12 Month EPS
Current-Quarter Estimate Revisions
The earnings estimate of $0.36 per share for the current quarter represents a change of -5.26% from the number reported a year ago.
The Zacks Consensus Estimate for The Bancorp has increased 7.58% over the last 30 days, as two estimates have gone higher compared to no negative revisions.
Current-Year Estimate Revisions
The company is expected to earn $1.29 per share for the full year, which represents a change of +21.7% from the prior-year number.
There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, two estimates have moved up for The Bancorp versus no negative revisions. This has pushed the consensus estimate 9.83% higher.
Favorable Zacks Rank
Thanks to promising estimate revisions, The Bancorp currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
While strong estimate revisions for The Bancorp have attracted decent investments and pushed the stock 7.6% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.