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Kadant (KAI) Stock Jumps 3.5%: Will It Continue to Soar?

Zacks Equity Research
·2-min read

Kadant Inc. (KAI) shares ended the last trading session 3.5% higher at $205.23. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 2.4% loss over the past four weeks.

Kadant’s rally is primarily driven by optimism regarding the company’s strong momentum in the flow control, industrial processing and material handling business units. Solid demand for the company’s products and solutions, higher project activity and robust aftermarket demand bodes well.

This equipment supplier for the papermaking and paper recycling industries is expected to post quarterly earnings of $2.08 per share in its upcoming report, which represents a year-over-year change of +45.5%. Revenues are expected to be $214.6 million, up 24.4% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

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For Kadant, the consensus EPS estimate for the quarter has been revised 4.7% 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 KAI going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Kadant belongs to the Zacks Manufacturing - General Industrial industry. Another stock from the same industry, Atlas Copco AB (ATLKY), closed the last trading session 1.6% higher at $56.72. Over the past month, ATLKY has returned 4.6%.

Atlas Copco AB's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.43. Compared to the company's year-ago EPS, this represents a change of +7.5%. Atlas Copco AB currently boasts a Zacks Rank of #1 (Strong Buy).


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Zacks Investment Research