Soaring profits see an upward signal for Herbalife LTD. (HLF) Stock
Herbalife LTD. (HLF) seems an attractive choice given a noticeable improvement in the company’s earnings outlook. The stock has been performing well lately, and the momentum could continue as analysts further raise their earnings estimates for the company.
The upward trend in estimate revisions, which stems from growing analyst optimism about the company’s earnings outlook, should be reflected in its share price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and short-term stock price movements. This insight is at the heart of our stock rating tool – the Zacks Rank.
The five-tier Zacks ranking system, which ranges from Zacks # 1 (strong buy) to Zacks # 5 (strong sell), has an impressive record of externally audited outperformance, stocks ranked # 1 of the Zacks generating an average annual return of + 25% since 2008.
For Herbalife LTD. There was strong agreement among coverage analysts to increase earnings estimates, which helped push consensus estimates significantly higher for the next quarter and full year.
The graph below shows the evolution of the EPS estimate of Zacks Consensus at 12 months:
12 month EPS
Revisions to estimates for the current quarter
The company is expected to earn $ 1.27 per share for the current quarter, which is a year-over-year change of + 33.68%.
For the past 30 days, Zacks’ Consensus Estimate for Herbalife LTD. increased 5.83% because an estimate increased from no negative revision.
Revisions to estimates for the current year
For the full year, the earnings estimate of $ 4.96 per share represents a change of + 33.69% from last year’s figure.
In terms of revised estimates, the trend for the current year also looks quite encouraging for Herbalife LTD. Over the past month, one estimate rose from any negative revision, helping the consensus estimate rise by 9.98%.
Favorable Zacks Rank
The promising revisions of the estimates have helped Herbalife LTD. gain a Zacks # 2 (Buy) rank. The Zacks Rank is a proven scoring tool that helps investors effectively harness the power of earnings estimate reviews and make the right investment decision. You can see the full list of current Zacks # 1 Rank (Strong Buy) stocks here.
Our research shows that stocks ranked Zacks Rank # 1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
At the end of the line
Although strong estimate revisions for Herbalife LTD. have attracted decent investment and pushed the stock 15.4% higher in the past four weeks, the stock may still be on the rise. So you can consider adding it to your portfolio immediately.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.