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County Bancorp (ICBK) Surges 47.3%: Is This an Indication of Further Gains?

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County Bancorp shares rallied 47.3% in the last trading session to close at $34.45. 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 4.3% loss over the past four weeks.

The announcement of the merger deal worth $219 million with Nicolet Bankshares drove the stock higher, which touched a new 52-week high of $35.82 in last day’s trading session.

Per the terms of the deal, County Bancorp will be acquired by Nicolet. Notably, the estimated deal value is 1.38 times County Bancorp's tangible book value as of Mar 31, 2021 and equals to 16.6X the company's 2021 estimated earnings per share.

The deal, which is expected to result in mid-single digits earnings accretion in 2022, is expected to close in the fourth quarter of 2021.

This bank that lends to dairy farmers is expected to post quarterly earnings of $0.54 per share in its upcoming report, which represents a year-over-year change of +35%. Revenues are expected to be $12.98 million, up 5.8% 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 County Bancorp, 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 ICBK 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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