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Strength Seen in Capstar Financial (CSTR): Can Its 5.4% Jump Turn into More Strength?

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Capstar Financial shares rallied 5.4% in the last trading session to close at $17.32. 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 4.7% gain over the past four weeks.

Shares of Capstar Financial rallied for the fifth consecutive day. With macroeconomic data indicating cooling inflation and the “soft landing” of the U.S. economy, market participants now don’t see any interest rate hike later this month. They are also 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 CSTR stock higher.

This bank holding company is expected to post quarterly earnings of $0.33 per share in its upcoming report, which represents a year-over-year change of -29.8%. Revenues are expected to be $28.71 million, down 8.1% 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 Capstar Financial, the consensus EPS estimate for the quarter has been revised 2.9% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on CSTR 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 >>>>

Capstar Financial belongs to the Zacks Banks - Southeast industry. Another stock from the same industry, United Bankshares (UBSI - Free Report) , closed the last trading session 4.3% higher at $34.53. Over the past month, UBSI has returned 11.3%.

United Bankshares' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.67. Compared to the company's year-ago EPS, this represents a change of -9.5%. United Bankshares currently boasts a Zacks Rank of #2 (Buy).

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