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Meridian Bank (MRBK) Soars 5.9%: Is Further Upside Left in the Stock?

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Meridian Corporation (MRBK - Free Report) shares soared 5.9% in the last trading session to close at $32.90. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8.4% loss over the past four weeks.

The performance of banks is expected improve in the quarters ahead on the back of rising interest rates. Last month, the Federal Reserve had hiked interest rates by 25 basis points for the first time since 2018 and signaled six more hikes this year to tame raging inflation. Further, there has been increasing expectation of announcement of a bigger rate hike in the next month’s FOMC meeting. This, thus, led to bullish investor sentiments, which drove Meridian Corporation stock higher.

This company is expected to post quarterly earnings of $0.79 per share in its upcoming report, which represents a year-over-year change of -52.1%. Revenues are expected to be $28.21 million, down 33.1% 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 Meridian Bank, the consensus EPS estimate for the quarter has been revised 8.6% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on MRBK 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 >>>>

Meridian Bank is part of the Zacks Banks - Northeast industry. Byline Bancorp (BY - Free Report) , another stock in the same industry, closed the last trading session 2.3% higher at $25.04. BY has returned -8.8% in the past month.

Byline Bancorp's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.47. Compared to the company's year-ago EPS, this represents a change of -17.5%. Byline Bancorp currently boasts a Zacks Rank of #2 (Buy).


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