Back to top

Image: Bigstock

Can Salisbury Bancorp (SAL) Run Higher on Rising Earnings Estimates?

Read MoreHide Full Article

Salisbury Bancorp could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.

The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this bank holding company, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For Salisbury Bancorp, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The earnings estimate of $0.99 per share for the current quarter represents a change of +25.32% from the number reported a year ago.

The Zacks Consensus Estimate for Salisbury Bancorp has increased 8.79% over the last 30 days, as two estimates have gone higher compared to no negative revisions.

Current-Year Estimate Revisions

For the full year, the earnings estimate of $3.82 per share represents a change of +26.91% from the year-ago number.

In terms of estimate revisions, the trend for the current year also appears quite encouraging for Salisbury Bancorp. Over the past month, two estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 7.01%.

Favorable Zacks Rank

The promising estimate revisions have helped Salisbury Bancorp earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Investors have been betting on Salisbury Bancorp because of its solid estimate revisions, as evident from the stock's 6.7% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.

Published in