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Imperial Oil (IMO) Moves 5.4% Higher: Will This Strength Last?

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Imperial Oil (IMO - Free Report) shares rallied 5.4% in the last trading session to close at $30.51. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 9.7% gain over the past four weeks.

Imperial Oil extended its rally for the seventh straight day, driven by optimism over strong commodity prices spurred by vaccine-related developments, accelerating economic growth and an improving demand picture. The recently announced first-quarter results also had a strong positive effect on the stock price. On Friday, the Canadian integrated energy company not only reported better-than-expected earnings and revenues but also hiked its dividend by 23% and announced accelerated stock repurchases. Further, an improving macro environment for energy and blowout results prompted increase in the price targets of Imperial Oil by a number of investment banks including BMO Capital, Scotiabank and Barclays.

Price and Consensus

Price Consensus Chart for IMO

This oil and gas and petroleum products company is expected to post quarterly earnings of $0.55 per share in its upcoming report, which represents a year-over-year change of +205.8%. Revenues are expected to be $5.55 billion, up 107.4% 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 Imperial Oil, the consensus EPS estimate for the quarter has been revised 3.5% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on IMO going forward to see if this recent jump can turn into more strength down the road.

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


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