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Tenneco (TEN) Soars 5%: Is Further Upside Left in the Stock?

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Tenneco (TEN - Free Report) shares soared 5% in the last trading session to close at $12.71. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 16.7% gain over the past four weeks.

Despite the billionaire activist investor Carl Icahn lowering its stake in Tenneco on Mar 9, the automotive components supplier extended its rally for the third straight day on Mar 12. Seemingly, investors are optimistic about the firm’s sharpened focus on innovation and quality to meet the changing dynamics of the auto industry. The firm’s emissions-control products optimize engine performance and meet the stringent air-quality legislations amid the heightening climate concerns. 

Buyout of Ohlins has expanded Tenneco’s product offerings and accelerated the development of advanced original equipment intelligent suspension solutions. While Tenneco is highly leveraged, its cost-containment efforts under Accelerate+ program, disciplined capex reductions and optimization of portfolio are driving the stock higher

Price and Consensus

Price Consensus Chart for Tenneco

This auto parts maker is expected to post quarterly earnings of $0.75 per share in its upcoming report, which represents a year-over-year change of +341.9%. Revenues are expected to be $4.48 billion, up 16.8% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Tenneco, the consensus EPS estimate for the quarter has been revised 0.9% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on TEN going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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