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Cowen (COWN) Soars 28.7%: Is Further Upside Left in the Stock?

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Cowen Group shares soared 28.7% in the last trading session to close at $30.93. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 11.9% loss over the past four weeks.

The performance of investment brokers is expected to improve significantly in the quarters ahead on the back of rising interest rates. In mid-June, the Federal Reserve hiked interest rates by 75 basis points, following one smaller hike in May and another in March. More such rate hikes are expected in the year to tame the raging inflation. This has led to the bullish investor sentiments, which drove Cowen stock higher.

This financial services company is expected to post quarterly earnings of $1.03 per share in its upcoming report, which represents a year-over-year change of -31.3%. Revenues are expected to be $346.18 million, down 11.3% 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 Cowen, 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 COWN 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 >>>>

Cowen belongs to the Zacks Financial - Investment Bank industry. Another stock from the same industry, Evercore (EVR - Free Report) , closed the last trading session 0.4% higher at $94.52. Over the past month, EVR has returned -16.3%.

For Evercore, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $2.50. This represents a change of -21.1% from what the company reported a year ago. Evercore currently has a Zacks Rank of #3 (Hold).


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