Surging Earnings Estimates Signal Upside for M&T Bank Corporation (MTB) Stock

Zacks Equity Research
·3-min read

Investors might want to bet on M&T Bank Corporation (MTB), 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.

The upward trend in estimate revisions for this company reflects growing optimism of analysts on its earnings prospects, which 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 M&T Bank Corporation, 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.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The earnings estimate of $2.99 per share for the current quarter represents a change of +53.33% from the number reported a year ago.

Over the last 30 days, five estimates have moved higher for M&T Bank Corporation compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 18.23%.

Current-Year Estimate Revisions

The company is expected to earn $12.18 per share for the full year, which represents a change of +22.54% from the prior-year number.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, eight estimates have moved up for M&T Bank Corporation versus no negative revisions. This has pushed the consensus estimate 19.05% higher.

Favorable Zacks Rank

Thanks to promising estimate revisions, M&T Bank Corporation 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

While strong estimate revisions for M&T Bank Corporation have attracted decent investments and pushed the stock 11.4% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.


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