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Strength Seen in AMC Networks (AMCX): Can Its 5.2% Jump Turn into More Strength?

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AMC Networks (AMCX) shares rallied 5.2% in the last trading session to close at $46.49. 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 20.3% loss over the past four weeks.

The upswing in share price came after Fox Business reporter Charlie Gasparino tweeted that management changes at the network may foreshadow a potential sale. Potential buyers include ViacomCBS, Disney, Netflix and Comcast, according to Gasparino.

Price and Consensus

Price Consensus Chart for AMCX
Price Consensus Chart for AMCX

This owner of cable channels including AMC and IFC is expected to post quarterly earnings of $1.11 per share in its upcoming report, which represents a year-over-year change of -15.9%. Revenues are expected to be $711.9 million, up 8.9% 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.

For AMC Networks, the consensus EPS estimate for the quarter has been revised 23.5% 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 AMCX 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 >>>>


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