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Sprague Resources (SRLP) Soars 11.8%: Is Further Upside Left in the Stock?

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Sprague Resources shares rallied 11.8% in the last trading session to close at $17.08. 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 18.8% gain over the past four weeks.

Sprague Resources extended its rally for the tenth straight day, driven by optimism over oil prices spurred by a supportive macro backdrop, ongoing government stimulus and the OPEC+ supply curtailments. The steady increase in crude prices to more than $80 a barrel has lifted the energy midstream space and contributed to the strength in Sprague Resources. The partnership’s units have also been buoyed by an unsolicited and non-binding buyout proposal from Hartree Partners, who already own a 74.5% stake in Sprague Resources.

This oil products and natural gas storage and distribution company is expected to post quarterly earnings of $0.34 per share in its upcoming report, which represents a year-over-year change of +1600%. Revenues are expected to be $968.22 million, up 54.3% 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 Sprague Resources, 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 SRLP 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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