Customers Bancorp (CUBI) Surges 7.7%: Is This an Indication of Further Gains?

Customers Bancorp (CUBI) shares rallied 7.7% in the last trading session to close at $31.12. 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 3.2% gain over the past four weeks.

Customers Bancorp witnessed a rise in share price for the second consecutive day. The performance of banks is expected to keep improving on rising interest rates and decent demand for loans. The Federal Reserve is expected to hike the interest rates to approximately 5.1% by 2023 (having already increased the rates by 450 basis points in 2022) to bring down the “sticky” inflation. This, thus, led to bullish investor sentiments, which drove CUBI stock higher.

This bank holding company is expected to post quarterly earnings of $1.66 per share in its upcoming report, which represents a year-over-year change of -43.2%. Revenues are expected to be $169.85 million, down 19.4% 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 Customers Bancorp, the consensus EPS estimate for the quarter has been revised 2.9% 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 CUBI going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Customers Bancorp belongs to the Zacks Banks - Southeast industry. Another stock from the same industry, Investar (ISTR), closed the last trading session 1.9% higher at $21.45. Over the past month, ISTR has returned -1.4%.

Investar's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.70. Compared to the company's year-ago EPS, this represents a change of +25%. Investar currently boasts a Zacks Rank of #3 (Hold).

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