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Signet (SIG) Soars 14%: Is Further Upside Left in the Stock?

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Signet (SIG - Free Report) shares ended the last trading session 14% higher at $69.58. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 4.7% gain over the past four weeks.

Shares of Signet got a boost from robust first-quarter fiscal 2022 results, wherein the top and the bottom line not only improved year on year, but also surpassed the Zacks Consensus Estimate. The company reported adjusted earnings of $2.23 per share that beat the Zacks Consensus Estimate of $1.41. The bottom line improved significantly from a loss of $1.59 reported in the year-ago quarter. Revenues of $1,688.8 million surpassed the Zacks Consensus Estimate of $1,602 million and increased 98.2% year on year. Results were supported by broad-based growth across categories as well as higher conversion and average order value. Markedly, the company continued to exhibit sturdy growth in the digital channel.

Additionally, management raised its fiscal 2022 outlook and also provided an encouraging view for the second quarter. For fiscal 2022, management now expects net revenues in the bracket of $6.50-$6.65 billion, compared to the prior projection of $6-$6.14 billion. For the second quarter, management expects revenues in the bracket of $1.60-$1.65 billion.

This jewelry company is expected to post quarterly earnings of $0.46 per share in its upcoming report, which represents a year-over-year change of +140.7%. Revenues are expected to be $1.26 billion, up 42.1% 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 Signet, the consensus EPS estimate for the quarter has been revised 35.8% 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 SIG 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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