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Trinseo (TSE) Surges 6.5%: Is This an Indication of Further Gains?

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Trinseo (TSE - Free Report) shares ended the last trading session 6.5% higher at $35.69. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 16.7% loss over the past four weeks.

TSE’s shares have gained in anticipation of strong second-quarter results. The company’s results are expected to be supported by strong end-market demand, benefits from commercial excellence actions and contributions from recently acquired businesses. It is also expected to gain from its pricing actions to counter freight, labor and raw material cost inflation.

This plastics and latex maker is expected to post quarterly earnings of $2.02 per share in its upcoming report, which represents a year-over-year change of -45.4%. Revenues are expected to be $1.37 billion, up 7.8% 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 Trinseo, the consensus EPS estimate for the quarter has been revised marginally higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on TSE 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 >>>>

Trinseo is part of the Zacks Rubber - Plastics industry. Myers (MYE - Free Report) , another stock in the same industry, closed the last trading session 3.8% higher at $24.19. MYE has returned 5.1% in the past month.

For Myers, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.40. This represents a change of +37.9% from what the company reported a year ago. Myers currently has a Zacks Rank of #3 (Hold).


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