Strength Seen in Luxfer (LXFR): Can Its 5.4% Jump Turn into More Strength?

Luxfer Holdings PLC (LXFR) shares ended the last trading session 5.4% higher at $14.77. 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 12.5% gain over the past four weeks.

Luxfer’s rally is primarily driven by optimism regarding its strong momentum in the commercial and defense end markets. Solid demand for the company’s several products, including magnesium powders and aerospace cylinders, is supporting its performance. Also, an increase in sales of Meals Ready to Eat (MREs) and Group Rations (UGR-E) bodes well for it.

This materials technology company specializing in aluminum, magnesium and zirconium is expected to post quarterly earnings of $0.25 per share in its upcoming report, which represents a year-over-year change of -10.7%. Revenues are expected to be $97 million, down 2.4% 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 Luxfer, 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 LXFR 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 >>>>

Luxfer is a member of the Zacks Manufacturing - General Industrial industry. One other stock in the same industry, Helios Technologies (HLIO), finished the last trading session 3.7% higher at $55.61. HLIO has returned 4.5% over the past month.

For Helios Technologies, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.64. This represents a change of +8.5% from what the company reported a year ago. Helios Technologies currently has a Zacks Rank of #1 (Strong Buy).

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This article originally published on Zacks Investment Research (zacks.com).

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