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Strength Seen in Texas Capital (TCBI): Can Its 7.9% Jump Turn into More Strength?

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Texas Capital (TCBI - Free Report) shares soared 7.9% in the last trading session to close at $55.47. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 23.3% loss over the past four weeks.

Yesterday, the U.S. consumer inflation for February was reported at 6%, slightly lower than January’s 6.4%. This and bank failures stemming from higher rates affecting the financial health of U.S. regional banks have likely increased investors’ confidence that the Federal Reserve may go slow with its hikes in the upcoming March meeting. After the sudden collapse of SVB Financial and Signature Bank, broader markets and bank stocks rebounded as investors’ sentiments settled down, supported by reassuring moves undertaken by government agencies. This drove the Texas Capital’s stock higher.

This holding company for Texas Capital Bank is expected to post quarterly earnings of $0.89 per share in its upcoming report, which represents a year-over-year change of +29%. Revenues are expected to be $266.97 million, up 31% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Texas Capital, 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 TCBI 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 >>>>

Texas Capital belongs to the Zacks Banks - Southwest industry. Another stock from the same industry, Cullen/Frost Bankers (CFR - Free Report) , closed the last trading session 7.5% higher at $111.52. Over the past month, CFR has returned -21.3%.

For Cullen/Frost, the consensus EPS estimate for the upcoming report has changed +0.1% over the past month to $2.62. This represents a change of +73.5% from what the company reported a year ago. Cullen/Frost currently has a Zacks Rank of #4 (Sell).


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