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Bonanza Creek (BCEI) Surges 7.9%: Is This an Indication of Further Gains?

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Bonanza Creek Energy (BCEI - Free Report) shares soared 7.9% in the last trading session to close at $36.44. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8.7% loss over the past four weeks.

Bonanza Creek Energy extended its rally for the second straight day, driven by optimism over rising 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 Monday, the upstream player not only reported better-than-expected earnings and revenues but also initiated a quarterly dividend. Further, an improving macro environment for energy and blowout results prompted Stifel analyst Michael S. Scialla to raise the price target on Bonanza Creek Energy.

Price and Consensus

Price Consensus Chart for BCEI

This oil and gas company is expected to post quarterly earnings of $0.90 per share in its upcoming report, which represents a year-over-year change of +47.5%. Revenues are expected to be $128.73 million, up 255.7% 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 Bonanza Creek, the consensus EPS estimate for the quarter has been revised 41.1% 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 BCEI 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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