Back to top

Analyst Blog

Read Full ArticleHide Full Article

With the earnings season nearing its end, the Finance sector seems to have been one of the best performers. So, we thought of highlighting a stock from the sector that reflects strong fundamentals and solid long-term growth opportunity.

Enterprise Financial Services Corp (EFSC - Free Report) is one such stock that has been witnessing upward estimate revisions, reflecting analysts’ optimism. In the last 30 days, the Zacks Consensus Estimate for 2017 and 2018 increased 1.9% and 4.6%, respectively.

Further, shares of this Zacks Rank #2 (Buy) stock gained 14.6% in the last six months, outperforming 11.7% growth of the Zacks categorized Midwest Banks industry.



Enterprise Financial has a number of other aspects that make it an attractive investment option.

Earnings Per Share Growth: Enterprise Financial witnessed EPS growth of nearly 11% in the last three-five years. This earnings momentum is likely to continue in the near term as reflected by the company’s projected EPS growth (F1/F0) of 8.7%.

Also, the company’s long-term (three-five years) estimated EPS growth rate of 9% promises reward for investors in the long run.

Revenue Strength: Enterprise Financial’s revenues increased at a CAGR of 3% over the last four years (2013–2016). Further, the top line is expected to grow 25.3% in 2017, higher than the industry average of 2.6%.

Superior Return on Equity (ROE): Enterprise Financial has an ROE of 10.52%, better than the industry average of 9.65%. This shows that the company reinvests its cash more efficiently.

Stock Seems Undervalued: Enterprise Financial has a trailing 12 month P/E ratio of 17.40 compared with the Zacks categorized Midwest Banks industry’s P/E ratio of 17.78. Based on this ratio, the stock seems undervalued.

Moreover, the company has a forward PE ratio (price relative to this year’s earnings) of just 16.34. Naturally, a slightly more value-oriented path may be ahead for Enterprise Financial stock in the near term too.

Other Stocks to Consider

Some other top-ranked stocks in the finance space are Raymond James Financial, Inc. (RJF - Free Report) , Comerica Incorporated (CMA - Free Report) and Lazard Ltd (LAZ - Free Report) .

Raymond James Financial witnessed an upward earnings estimate revision of 6% for the current fiscal year, in the last 60 days. Its share price increased 11.5% in the last six months. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Comerica carries a Zacks Rank #2. For the current year, in the last 60 days, its Zacks Consensus Estimate was revised 10.2% upward. The company’s share price increased 23.3% in the last six months.

Lazard has a Zacks Rank #2. The company witnessed an upward earnings estimate revision of 5.7% for the current year, in the last 60 days. Its share price increased 16.5% in the last six months.

The Best & Worst of Zacks

Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>