Strength Seen in First United Corporation (FUNC): Can Its 7.2% Jump Turn into More Strength?

Zacks Equity Research
·2 min read

First United Corporation FUNC shares soared 7.2% in the last trading session to close at $18.76. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 17.6% loss over the past four weeks.

The performance of the banking sector is expected to improve significantly in the quarters ahead on the back of rising interest rates. In mid-June, the Federal Reserve hiked interest rates by 75 basis points, following one hike in May and another in March. More such rate hikes are expected in the year to tame the raging inflation. This has led to the bullish investor sentiments, which drove First United Corporation stock higher.

Also, the company declared a quarterly cash dividend of 15 cents per share, to be paid out on Aug 1. This probably further added to the price rise.

This company is expected to post quarterly earnings of $0.84 per share in its upcoming report, which represents a year-over-year change of +27.3%. Revenues are expected to be $18.41 million, up 7.8% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For First United Corporation, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on FUNC 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 >>>>

First United Corporation is part of the Zacks Banks - Northeast industry. Webster Financial WBS, another stock in the same industry, closed the last trading session 3% lower at $42.15. WBS has returned -10.2% in the past month.

For Webster Financial , the consensus EPS estimate for the upcoming report has changed +0.7% over the past month to $1.24. This represents a change of +2.5% from what the company reported a year ago. Webster Financial currently has a Zacks Rank of #3 (Hold).


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