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Strength Seen in Western New England Bancorp (WNEB): Can Its 6.3% Jump Turn into More Strength?

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Western New England Bancorp (WNEB - Free Report) shares rallied 6.3% in the last trading session to close at $9.63. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 4.8% loss over the past four weeks.

The performance of banks is expected to keep improving on rising interest rates and decent demand for commercial and consumer loans. The Federal Reserve is expected to hike the interest rates to approximately 5.1% by 2023 (having already increased the rates by 450 basis points this year) to bring down the “sticky” inflation. This, thus, led to bullish investor sentiments, which drove WNEB stock higher.

This bank holding company is expected to post quarterly earnings of $0.28 per share in its upcoming report, which represents no change from the year-ago quarter. Revenues are expected to be $23.25 million, up 3.6% 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 Western New England 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 WNEB going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Western New England Bancorp is a member of the Zacks Banks - Foreign industry. One other stock in the same industry, Santander Mexico (BSMX - Free Report) , finished the last trading session 0.5% higher at $6.03. BSMX has returned -1.6% over the past month.

For Santander Mexico, the consensus EPS estimate for the upcoming report has changed +7.7% over the past month to $0.21. This represents a change of +10.5% from what the company reported a year ago. Santander Mexico currently has a Zacks Rank of #1 (Strong Buy).

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