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Earnings Estimates Rising for Nexstar (NXST): Will It Gain?

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Investors might want to bet on Nexstar Broadcasting Group (NXST - Free Report) , as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.

The upward trend in estimate revisions for this television broadcaster reflects growing optimism of analysts on its earnings prospects, 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.

For Nexstar, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

For the current quarter, the company is expected to earn $6.44 per share, which is a change of +172.88% from the year-ago reported number.

Over the last 30 days, two estimates have moved higher for Nexstar compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 5.41%.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $16.14 per share, representing a year-over-year change of +236.25%.

The revisions trend for the current year also appears quite promising for Nexstar, with four estimates moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 11.58%.

Favorable Zacks Rank

The promising estimate revisions have helped Nexstar earn 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.

Bottom Line

Nexstar shares have added 28% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.


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