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Clearwater Paper (CLW) Stock Jumps 5.6%: Will It Continue to Soar?

Clearwater Paper (CLW) witnessed a jump in share price last session on above-average trading volume. The latest trend in earnings estimate revisions for the stock doesn't suggest further strength down...

This story originally appeared on Zacks

Clearwater Paper (CLW) shares rallied 5.6% in the last trading session to close at $44.01. 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 18.3% gain over the past four weeks.

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Shares of Clearwater Paper have gained following an upgrade by an analyst at RBC Capital from Sector Perform to Outperform. The analyst also raised its price target from $32 to $50. Per the analyst, headwinds like commodity price inflation and the challenging year-over-year comparisons in tissue are “turning more favorable” with pulp pricing likely to move lower in the near-term and the implementation of paperboard price hikes. Backed by these factors, the analyst expects the company to deliver improved operating results.

This maker of pulp-based products is expected to post quarterly earnings of $0.30 per share in its upcoming report, which represents a year-over-year change of -81.1%. Revenues are expected to be $424 million, down 7.3% 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 Clearwater Paper, 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 CLW 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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