Strength Seen in EnerSys (ENS): Can Its 5.7% Jump Turn into More Strength?

EnerSys (ENS) shares soared 5.7% in the last trading session to close at $115.56. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 2.3% gain over the past four weeks.

EnerSys’ rally is primarily driven by solid momentum in its Energy Systems segment supported by expansion of U.S. communication networks and strong AI-led data demand. The global megatrends, including 5G expansion, rural broadband build-outs, modernization of energy grids, electrification, automation and decarbonization, are aiding the company.

This maker of industrial batteries is expected to post quarterly earnings of $2.36 per share in its upcoming report, which represents a year-over-year change of +11.3%. Revenues are expected to be $888.23 million, up 0.5% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For EnerSys, 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 ENS 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 >>>>

EnerSys belongs to the Zacks Manufacturing - Electronics industry. Another stock from the same industry, Franklin Electric (FELE), closed the last trading session 1.2% higher at $92.84. Over the past month, FELE has returned -3%.

Franklin Electric's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.26. Compared to the company's year-ago EPS, this represents a change of +7.7%. Franklin Electric currently boasts a Zacks Rank of #3 (Hold).

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

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