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Northern Technologies (NTIC) Soars 6.1%: Is Further Upside Left in the Stock?

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Northern Technologies (NTIC - Free Report) shares soared 6.1% in the last trading session to close at $17.20. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 23.5% gain over the past four weeks.

Optimism over improving demand for the company’s core Zerust business in industrial markets on the back of a broader economic recovery is driving the stock higher. Investors are also enthused about the reinstatement of the company's quarterly cash dividend that was suspended last year due to the COVID-19 crisis.

Price and Consensus

Price Consensus Chart for Northern Technologies

This rust and corrosion prevention company is expected to post quarterly earnings of $0.08 per share in its upcoming report, which represents a year-over-year change of +300%. Revenues are expected to be $12 million, down 9.3% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Northern Technologies, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on NTIC going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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