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Can Byline Bancorp (BY) Run Higher on Rising Earnings Estimates?

Byline Bancorp (BY) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.

The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this bank holding company, 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 Byline Bancorp, 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

For the current quarter, the company is expected to earn $0.63 per share, which is a change of +8.62% from the year-ago reported number.

The Zacks Consensus Estimate for Byline Bancorp has increased 7.95% over the last 30 days, as two estimates have gone higher compared to no negative revisions.

Current-Year Estimate Revisions

The company is expected to earn $2.51 per share for the full year, which represents a change of +6.36% from the prior-year number.

The revisions trend for the current year also appears quite promising for Byline Bancorp, with three estimates moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 6.93%.

Favorable Zacks Rank

The promising estimate revisions have helped Byline Bancorp earn a Zacks Rank #1 (Strong 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

Byline Bancorp shares have added 9.1% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.

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Byline Bancorp, Inc. (BY) : Free Stock Analysis Report

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Zacks Investment Research