Sanderson Farms shares rallied 7.4% in the last trading session to close at $195.88. 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 0.9% loss over the past four weeks.

Shares of Sanderson Farms got a boost on its latest divestiture-related agreement with Cargill and Continental Grain Company. The abovementioned three companies reached a deal for a joint venture between Cargill and Continental Grain to buy Sanderson Farms for $203 per share (in cash). The deal values Sanderson Farms at $4.53 billion. Once the deal is concluded, Sanderson Farms will be combined with Wayne Farms to form a best-in-class poultry firm in the United States. Wane Farms is a subsidiary of Continental Grain.

This poultry producer is expected to post quarterly earnings of $6.61 per share in its upcoming report, which represents a year-over-year change of +346.6%. Revenues are expected to be $1.3 billion, up 35.7% 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 Sanderson Farms, 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 SAFM 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 >>>>