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Surging Earnings Estimates Signal Upside for Park-Ohio (PKOH) Stock

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Investors might want to bet on Park-Ohio (PKOH - Free Report) , as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.

Analysts' growing optimism on the earnings prospects of this industrial supply-chain logistics company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

Consensus earnings estimates for the next quarter and full year have moved considerably higher for Park-Ohio, as there has been strong agreement among the covering analysts in raising estimates.

Current-Quarter Estimate Revisions

For the current quarter, the company is expected to earn $0.26 per share, which is a change of +178.79% from the year-ago reported number.

The Zacks Consensus Estimate for Park-Ohio has increased 187.93% over the last 30 days, as one estimate has gone higher while one has gone lower.

Current-Year Estimate Revisions

For the full year, the earnings estimate of $1.95 per share represents a change of +262.5% from the year-ago number.

In terms of estimate revisions, the trend for the current year also appears quite encouraging for Park-Ohio. Over the past month, two estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 393.67%.

Favorable Zacks Rank

The promising estimate revisions have helped Park-Ohio earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

While strong estimate revisions for Park-Ohio have attracted decent investments and pushed the stock 25.2% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.


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