Earnings Estimates Moving Higher for Caleres Inc. (CAL): Time to Buy?
Zacks Investment Research | Jan 17, 2022 12:20AM ET
Investors might want to bet on Caleres Inc. (NYSE:CAL), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.
Analysts' growing optimism on the earnings prospects of this footwear wholesaler and retailer is driving estimates higher, which 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 Caleres Inc. Strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates 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 company is expected to earn $0.67 per share for the current quarter, which represents a year-over-year change of +2133.33%.
Over the last 30 days, one estimate has moved higher for Caleres Inc. compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 45.65%.
Current-Year Estimate Revisions
For the full year, the company is expected to earn $4.06 per share, representing a year-over-year change of +390%.
There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, one estimate has moved up for Caleres Inc. versus no negative revisions. This has pushed the consensus estimate 5.32% higher.
Favorable Zacks Rank
The promising estimate revisions have helped Caleres Inc. 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.
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Bottom Line
Caleres Inc. shares have added 5.7% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.
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