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Strength Seen in Calumet Specialty Products Partners, L.P. (CLMT): Can Its 9.3% Jump Turn into More Strength?

Calumet Specialty Products Partners, L.P. (CLMT) was a big mover last session on higher-than-average trading volume. The latest trend in earnings estimate revisions might not help the stock continue moving...

This story originally appeared on Zacks

Calumet Specialty Products Partners, L.P. (CLMT) shares soared 9.3% in the last trading session to close at $9.61. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 27.6% gain over the past four weeks.

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Calumet Specialty Products Partners extended its rally for the fifth straight day, driven by optimism over oil prices spurred by a supportive macro backdrop, ongoing government stimulus and the OPEC+ supply curtailments. The recovery in crude prices to a seven year-high of nearly $80 a barrel has lifted the fuel refining space and contributed to the strength in Calumet Specialty Products Partners. Besides, an improving macro environment prompted H.C. Wainwright analyst Amit Dayal to initiate coverage on the partnership.

This company is expected to post quarterly loss of $0.10 per share in its upcoming report, which represents a year-over-year change of +79.6%. Revenues are expected to be $964.4 million, up 69.8% 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 Calumet Specialty Products Partners, L.P., the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on CLMT 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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