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Shore Bancshares (SHBI) Soars 7.3%: Is Further Upside Left in the Stock?

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Shore Bancshares (SHBI - Free Report) shares soared 7.3% in the last trading session to close at $13.80. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 6.2% gain over the past four weeks.

After 11 interest rate hikes, the Fed's decision to pause rate hikes for the third month drove bullish sentiments across markets amid the optimism of easing inflation pressures. With this, the interest rates remain at a 22-year high of 5.25-5.5%. Further, the central bank indicated three interest rate cuts by 2024-end. These developments turned investor sentiment bullish on bank stocks, as high funding costs faced by the industry players are expected to decline in the next year, supporting spread income and margins. Hence, the SHBI stock gained.

This bank holding company is expected to post quarterly earnings of $0.38 per share in its upcoming report, which represents a year-over-year change of -17.4%. Revenues are expected to be $51.17 million, up 55.8% 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 Shore Bancshares, 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 SHBI 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 >>>>

Shore Bancshares is part of the Zacks Banks - Northeast industry. Midland States Bancorp (MSBI - Free Report) , another stock in the same industry, closed the last trading session 4.8% higher at $26.16. MSBI has returned 3.2% in the past month.

For Midland States Bancorp, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.79. This represents a change of -7.1% from what the company reported a year ago. Midland States Bancorp currently has a Zacks Rank of #3 (Hold).

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