An improving operating backdrop, a rising rate environment and expectations of lesser regulations, along with the strengthening of domestic economy, should continue to support banking stocks. Keeping this in mind, today we have chosen First Commonwealth Financial Corporation (FCF - Free Report) for you to consider.
This Indiana, PA-based company not only beat estimates in the second quarter, but also has been witnessing upward estimate revisions, reflecting analysts’ optimism about its earnings growth prospects.
Over the last 30 days, the Zacks Consensus Estimate for 2017 has increased 1.3%. The stock has surged 26.4% in a year, outperforming the industry’s gain of 18.6%. We believe that the momentum is likely to continue for this Zacks Rank #2 (Buy) company.
Additionally, First Commonwealth has a number of other aspects that make it a solid investment option.
Revenue Strength: First Commonwealth’s revenues witnessed a CAGR of 3.5% over the last three years (2014-2016). Further, the top line is expected to grow 16.1% in 2017 and 8% in 2018.
Earnings Growth: While First Commonwealth’s historical earnings per share (EPS) growth rate of 23.6% compares favorably with the industry average of 10.9%, investors should really focus on its projected EPS growth (F1/F0). Here, the company is looking to grow at a rate of 14%, substantially higher than the industry average of 10%.
Strong Leverage: First Commonwealth’s debt/equity ratio is 0.09 compares with the industry average of 0.55. The relatively strong financial health of the company will help it perform better than its peers under a dynamic business environment.
Other Stocks Worth a Look
Some other stocks worth considering in the same industry are First Internet Bancorp (INBK - Free Report) , FB Financial Corporation (FBK - Free Report) and CNB Financial Corporation (CCNE - Free Report) .
First Internet Bancorp has witnessed an upward earnings estimate revision of 8.6% for the current year, over 60 days. Also, in a year’s time, its share price has jumped 32.3%. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
FB Financial has a Zacks Rank #2. For the current year, in 60 days, its Zacks Consensus Estimate has been revised 3.2% upward. Also, its share price has increased 65.6% in the last 12 months.
CNB Financial also carries a Zacks Rank #2. The company has witnessed an upward earnings estimate revision of 6.7% for the current year, in 60 days. Also, its share price has seen a 22% rise in a year.
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