Santander Consumer shares soared 11.3% in the last trading session to close at $40.56. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 4.5% loss over the past four weeks.
The increased investor optimism can be attributed to the news of the company receiving an offer from its majority shareholder, Santander Holdings USA, Inc. on Jul 1, to acquire all of the former’s outstanding common shares not currently owned by Santander Holdings at a purchase price of $39 per share in cash.
The proposal represents a 7.4% increase from Santander Consumer’s Jun 30 closing price of $36.32. Santander Holdings currently owns around 80% of Santander Consumer’s outstanding shares of common stock. If the transaction materializes, Santander Consumer will become a wholly-owned subsidiary of Santander Holdings.
However, considering the fact that Santander Consumer’s stock is currently trading at $40.56, higher than what Santander Holdings has offered, there is almost no price appreciation potential down the road.
This consumer finance company is expected to post quarterly earnings of $1.89 per share in its upcoming report, which represents a year-over-year change of +730%. Revenues are expected to be $1.99 billion, up 0.7% 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 Santander Consumer, 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.
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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Santander Consumer (SC) Stock Jumps 11.3%: Will It Continue to Soar?
Santander Consumer shares soared 11.3% in the last trading session to close at $40.56. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 4.5% loss over the past four weeks.
The increased investor optimism can be attributed to the news of the company receiving an offer from its majority shareholder, Santander Holdings USA, Inc. on Jul 1, to acquire all of the former’s outstanding common shares not currently owned by Santander Holdings at a purchase price of $39 per share in cash.
The proposal represents a 7.4% increase from Santander Consumer’s Jun 30 closing price of $36.32. Santander Holdings currently owns around 80% of Santander Consumer’s outstanding shares of common stock. If the transaction materializes, Santander Consumer will become a wholly-owned subsidiary of Santander Holdings.
However, considering the fact that Santander Consumer’s stock is currently trading at $40.56, higher than what Santander Holdings has offered, there is almost no price appreciation potential down the road.
This consumer finance company is expected to post quarterly earnings of $1.89 per share in its upcoming report, which represents a year-over-year change of +730%. Revenues are expected to be $1.99 billion, up 0.7% 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 Santander Consumer, 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.
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 >>>>