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Carpenter (CRS) Moves 8.8% Higher: Will This Strength Last?

Carpenter Technology (CRS) shares rallied 8.8% in the last trading session to close at $39.06. 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 3.8% loss over the past four weeks.

Carpenter Technology’s shares have gained, following an upgrade by an analyst at Cowen & Co from market perform to outperform. The firm has a $45.00 target price on the stock which is 25% higher than the company's current price.

Per the analyst, the recent pullback in the company’s shares provide a solid entry point and expects accelerating earnings gains and a “catalyst-rich backdrop” with 787, 737, and A320 rate hikes as well as the investor day.

This maker of stainless steels and special alloys is expected to post quarterly loss of $0.08 per share in its upcoming report, which represents a year-over-year change of +71.4%. Revenues are expected to be $541.11 million, up 39.6% 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 Carpenter, the consensus EPS estimate for the quarter has been revised 300% 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 CRS 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 >>>>

Carpenter belongs to the Zacks Steel - Speciality industry. Another stock from the same industry, Allegheny Technologies (ATI), closed the last trading session 1.8% higher at $31.67. Over the past month, ATI has returned -0.9%.

Allegheny Technologies' consensus EPS estimate for the upcoming report has changed -4.2% over the past month to $0.49. Compared to the company's year-ago EPS, this represents a change of +880%. Allegheny Technologies currently boasts a Zacks Rank of #1 (Strong Buy).

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