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Texas Capital (TCBI) Soars 6.2%: Is Further Upside Left in the Stock?

Texas Capital (TCBI) witnessed a jump in share price last session on above-average trading volume. The latest trend in earnings estimate revisions for...

This story originally appeared on Zacks

Texas Capital TCBI shares rallied 6.2% in the last trading session to close at $62.13. 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 13.5% loss over the past four weeks.

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Buoyant investor reaction surrounding the banking sector’s stellar performance drove Texas Capital’s stock. The possibility of a sooner-than-anticipated rate hike in 2022 and the Federal Reserve’s asset purchase tapering also drove the 10-year yield on the U.S. Treasury note to 1.51% in yesterday’s early trading. This likely sparked investors’ interest in Texas Capital stock.

This holding company for Texas Capital Bank is expected to post quarterly earnings of $1.12 per share in its upcoming report, which represents a year-over-year change of +3.7%. Revenues are expected to be $222.38 million, down 17% 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 Texas Capital, the consensus EPS estimate for the quarter has been revised 5.3% 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 TCBI 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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