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Kraton (KRA) Surges 5.5%: Is This an Indication of Further Gains?

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Kraton Performance Polymers (KRA - Free Report) shares soared 5.5% in the last trading session to close at $38.38. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 2.8% gain over the past four weeks.

KRA’s shares gained after the company reported that it has received Critical Guidance Recognition from the Association of Plastic Recyclers (APR) for its CirKular+ Performance Enhancement Series C2000 and C3000 for HDPE bottles. The esteemed recognition strengthens its commitment to enable sustainable high-performance solutions to address the needs of the plastics industry. 

This specialty chemical company is expected to post quarterly earnings of $0.49 per share in its upcoming report, which represents a year-over-year change of +63.3%. Revenues are expected to be $432.2 million, up 21.5% 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 Kraton, 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 KRA 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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