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German American Bancorp (GABC) Surges 6.0%: Is This an Indication of Further Gains?

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German American Bancorp (GABC - Free Report) shares rallied 6% in the last trading session to close at $33. 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 3.3% loss over the past four weeks.

Almost a week after getting hurt by the industry-wide concern related to commercial real estate (CRE) loans, shares of German American Bancorp are showing signs of improvement. While CRE loans constitute almost 50% of the company’s total net loans, investors seem to be regaining confidence in the stock on the expectation that the Federal Reserve’s move to cut interest rates this year will support its top-line growth to an extent.

This financial services holding company is expected to post quarterly earnings of $0.64 per share in its upcoming report, which represents a year-over-year change of -9.9%. Revenues are expected to be $61.05 million, down 4.6% 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 German American Bancorp, the consensus EPS estimate for the quarter has been revised 0.5% 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 GABC 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 >>>>

German American Bancorp belongs to the Zacks Banks - Midwest industry. Another stock from the same industry, 1st Source (SRCE - Free Report) , closed the last trading session 5.4% higher at $51.24. Over the past month, SRCE has returned -4.7%.

For 1st Source, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.11. This represents a change of -11.2% from what the company reported a year ago. 1st Source currently has a Zacks Rank of #1 (Strong Buy).

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