Strength Seen in HudBay Minerals (HBM): Can Its 6.8% Jump Turn into More Strength?

HudBay Minerals (HBM) shares ended the last trading session 6.8% higher at $8.18. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 13.5% gain over the past four weeks.

Hudbay’s shares appreciated on the back of higher metal prices. Copper futures for March delivery surged to $4.5 per pound — levels last seen in October 2021. This can be attributed to a pullback in the U.S dollar and expectations of stronger demand from China while inventories held at the London Metals Exchange are at multi-year lows. Meanwhile, Goldman has raised the 12-month target price of copper to $12,000 per ton (around $5.4 per pound).

Gold prices have gained as the dollar and Treasury yields retreated as U.S. inflation posted its largest annual increase in nearly four decades. U.S. gold futures settled at $1,827.3 per ounce, up 0.5% in a day — levels last seen in May.

This mining company is expected to post quarterly earnings of $0.10 per share in its upcoming report, which represents a year-over-year change of +266.7%. Revenues are expected to be $432.12 million, up 34.1% 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 HudBay Minerals, the consensus EPS estimate for the quarter has been revised 16.2% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on HBM 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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