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Signature Bank (SBNY) Moves 6.1% Higher: Will This Strength Last?

Signature Bank (SBNY) witnessed a jump in share price last session on above-average trading volume. The latest trend in earnings estimate revisions fo...

This story originally appeared on Zacks

Signature Bank (SBNY) shares ended the last trading session 6.1% higher at $276.64. 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 0.9% loss over the past four weeks.

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Optimistic investor reaction surrounding the robust performance of the banking sector drove Signature Bank’s stock. The prospect of a tighter monetary policy — increasing likelihood of a sooner-than-expected rate hike in 2022 and asset purchase tapering in the cards — also drove the 10-year yield on the US Treasury note to 1.5% yesterday. This likely sparked investors’ interest in Signature Bank’s stock, owing to the company’s asset-sensitive balance sheet.

This commercial bank is expected to post quarterly earnings of $3.62 per share in its upcoming report, which represents a year-over-year change of +38.2%. Revenues are expected to be $507.9 million, up 23% 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 Signature Bank, the consensus EPS estimate for the quarter has been revised marginally higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on SBNY 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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