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Sterling Bancorp (SBT) Soars 5.4%: Is Further Upside Left in the Stock?

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Sterling Bancorp (SBT - Free Report) shares soared 5.4% in the last trading session to close at $6.10. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 4.5% gain over the past four weeks.

Sterling Bancorp stock touched a new 52-week high of $6.27 in last day's trading session. The upside can be attributed to the announcement of the settlement of shareholder demand. SBT announced that it has reached an agreement to settle the shareholder demand for a derivative action originally set forth in a letter from a purported shareholder, received on July 28, 2020 and reflected in a shareholder derivative complaint.

The settlement provides for SBT's adoption and implementation of certain corporate governance reforms and the payment of attorneys’ fees and expenses in exchange for the release of all defendants from all alleged claims.

This bank holding company is expected to post quarterly earnings of $0.06 per share in its upcoming report, which represents a year-over-year change of +126.1%. Revenues are expected to be $22.7 million, down 11.8% 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 Sterling Bancorp, 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 SBT 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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