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North American Construction (NOA) Soars 6.2%: Is Further Upside Left in the Stock?

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North American Construction Group Ltd. or NACG (NOA - Free Report) shares rallied 6.2% in the last trading session to close at $14.98. 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 4.1% gain over the past four weeks.

Shares of the company surged after the company announced that Mikisew North American Limited Partnership (MNALP) has secured a contract from a major oil sands producer. The contract extends the existing master service agreement between NACG and the producer but transitions to MNALP as the contractor. The scope of work under the contract has been extended till December 2023. NACG owns a 49% stake and voting interest in MNALP, with the majority owner (51%) being the Mikisew Group of Companies.

 

Price and Consensus

Price Consensus Chart for NOA

This heavy construction and mining services company is expected to post quarterly earnings of $0.37 per share in its upcoming report, which represents a year-over-year change of +85%. Revenues are expected to be $129.55 million, up 83.6% 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 North American Construction, 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 NOA 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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