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Heritage Commerce (HTBK) Surges 6.8%: Is This an Indication of Further Gains?

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Heritage Commerce (HTBK - Free Report) shares ended the last trading session 6.8% higher at $9.07. 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 0.2% gain over the past four weeks.

With several macroeconomic data pointing toward cooling inflation and the “soft landing” of the U.S. economy, market participants now see relatively very low chance of a hike in interest rates this month. Further, they are of opinion that the Federal Reserve will start cutting rates as early as March 2024. These factors seem to have turned investors bullish on banks, driving the Heritage Commerce stock higher.

This holding company for Heritage Bank of Commerce is expected to post quarterly earnings of $0.24 per share in its upcoming report, which represents a year-over-year change of -29.4%. Revenues are expected to be $46.58 million, down 14.5% 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 Heritage Commerce, 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 HTBK 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 >>>>

Heritage Commerce belongs to the Zacks Banks - West industry. Another stock from the same industry, FS Bancorp (FSBW - Free Report) , closed the last trading session 3.9% higher at $31.54. Over the past month, FSBW has returned 4.3%.

FS Bancorp's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.02. Compared to the company's year-ago EPS, this represents a change of +5.2%. FS Bancorp currently boasts a Zacks Rank of #4 (Sell).

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