NGL Energy Partners LP (NGL) 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 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. This insight is at the core of our stock rating tool -- the Zacks Rank.
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.
Consensus earnings estimates for the next quarter and full year have moved considerably higher for NGL Energy Partners LP, as there has been strong agreement among the covering analysts in raising estimates.
Current-Quarter Estimate Revisions
The company is expected to earn $0.11 per share for the current quarter, which represents a year-over-year change of +375%.
Over the last 30 days, one estimate has moved higher for NGL Energy Partners LP compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 210%.
Current-Year Estimate Revisions
For the full year, the company is expected to earn $0.87 per share, representing a year-over-year change of +866.67%.
The revisions trend for the current year also appears quite promising for NGL Energy Partners LP, with one estimate moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 171.88%.
Favorable Zacks Rank
The promising estimate revisions have helped NGL Energy Partners LP earn 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.
While strong estimate revisions for NGL Energy Partners LP have attracted decent investments and pushed the stock 26.3% 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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