Monday's IBD Screen of the Day searches for stocks in which analysts are raising their profit estimates. Bank stock Eastern Bankshares is shining above the rest on this list, with solid fundamentals in a tough industry group.
EBC stock has a solid Relative Strength Rating of 86 and is currently grinding through a 25-week cup-with-handle base, with a buy point of 21.55. In addition, it just hit a new high on the relative strength line, as indicated by the blue dot on the MarketSmith chart.
Consistent Sales And Growth
Eastern Bankshares is the top stock in the Banks-Northeast group, which is ranked No. 54 out of the 197 groups that IBD tracks. This financial segment has moved swiftly higher in relative strength, from No. 107 just one week ago.
EBC has produced earnings-per-share growth ranging from 19% to 45% in the prior three quarters. Sales growth has been accelerating as well, with the June-ended quarter up 21%, from 14% in March and 13% in December.
Analysts are expecting 45% annual EPS growth in 2022 and 27% in 2023. The company holds a 98 Composite Rating and a 93 EPS Rating.
On Sept. 7, the company announced a stock-buyback program of up to 8.9 million shares, or about 5% of its outstanding shares, to begin later this month. Eastern also pays out a 1.9% annual dividend yield to shareholders.
The stock came public on Oct. 15, 2020.
According to "How To Make Money In Stocks'' by William O'Neil, many big winners had their IPO in the prior one to eight or 10 years because this marks an early growth stage. With this in mind, recent IPOs may be something to keep on your radar.
Funds Scoop Up This Bank Stock
Zack's ranked Eastern Bankshares as a "strong buy" on Sept. 15, based on rapidly-rising earnings estimates. The stock rallied in higher-than-average volume in reaction to the news.
Mutual funds have taken notice and are adding exposure, with 340 owning shares in June, up from 315 in March and 292 in December. This dovetails nicely with the bank stock's A- Accumulation/Distribution Rating, meaning institutions may have been accumulating (buying) the stock over the last 13 weeks.
