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Earnings Estimates Moving Higher for SP Plus (SP): Time to Buy?

SP Plus (SP) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.

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This story originally appeared on Zacks

Investors might want to bet on SP Plus (SP), 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.

- Zacks

The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this parking facility management company, 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 -- is principally built on this insight.

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 SP Plus, 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.

Current-Quarter Estimate Revisions

The earnings estimate of $0.53 per share for the current quarter represents a change of +2550% from the number reported a year ago.

Over the last 30 days, two estimates have moved higher for SP Plus compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 15.39%.

Current-Year Estimate Revisions

The company is expected to earn $1.94 per share for the full year, which represents a change of +340.91% from the prior-year number.

In terms of estimate revisions, the trend for the current year also appears quite encouraging for SP Plus. Over the past month, two estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 13.78%.

Favorable Zacks Rank

Thanks to promising estimate revisions, SP Plus currently carries a Zacks Rank #2 (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.

Bottom Line

Investors have been betting on SP Plus because of its solid estimate revisions, as evident from the stock's 10.1% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.



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