LSB (LXU Quick QuoteLXU - Free Report) shares soared 7.6% in the last trading session to close at $7.53. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 15.1% gain over the past four weeks.

LXU’s shares are heading higher following its announcement of an agreement to exchange the shares of LSB Series E-1 and Series F-1 redeemable preferred stock held by Eldridge for shares of LSB common stock. LSB plans to exchange roughly $300 million of preferred stock held by Eldridge into an equivalent value of LSB common stock based on an exchange price of $6.16. The transaction is expected to lower cost of capital, simplify capital structure and offer greater financial flexibility to execute growth initiatives.

This chemical maker is expected to post quarterly earnings of $0.22 per share in its upcoming report, which represents a year-over-year change of +164.7%. Revenues are expected to be $140.24 million, up 33.5% 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 LSB, 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 LXU 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 >>>>