Colfax (CFX) Moves 5.8% Higher: Will This Strength Last?

Zacks Equity Research
·2 min read

Colfax CFX shares rallied 5.8% in the last trading session to close at $47.79. 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 16.1% gain over the past four weeks.

Shares of Colfax appreciated after the leading manufacturing and engineering company announced its plan to split-up its fabrication technology and medical technology businesses into two separate companies. The split-up, which is expected to close in the first quarter of 2022, is planned to be carried out following a tax-free method. Notably, Colfax expects the separation to unlock significant values for each of its businesses, enabling them to deliver high growth, solid free cash flow and margin expansion.

Price and Consensus

Price Consensus Chart for Colfax
Price Consensus Chart for Colfax

This manufacturing and engineering company is expected to post quarterly earnings of $0.38 per share in its upcoming report, which represents no change from the year-ago quarter. Revenues are expected to be $830.14 million, up 1.7% 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 Colfax, the consensus EPS estimate for the quarter has been revised 5.3% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on CFX 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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