Millicom International Cellular (TIGO) Soars 6.5%: Is Further Upside Left in the Stock?

Millicom International Cellular SA (TIGO) shares soared 6.5% in the last trading session to close at $56.03. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 1.3% loss over the past four weeks.

The uptrend was largely buoyed by renewed optimism relating to ongoing mergers and acquisitions in Latin America, including moves to consolidate Tigo with Telefónica assets in markets like Colombia. TIGO shares also seemed to have benefited from potential market opportunities from fiber densification and a wide range of digital services and products, including TIGO Money for mobile financial services, TIGO Sports for local entertainment and TIGO ONEtv for pay TV, high-speed data, voice and business-to-business solutions such as cloud and security. 

This company is expected to post quarterly earnings of $1.05 per share in its upcoming report, which represents a year-over-year change of +425%. Revenues are expected to be $1.56 billion, up 9% 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 Millicom International Cellular, 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 TIGO going forward to see if this recent jump can turn into more strength down the road.

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

Millicom International Cellular is a member of the Zacks Wireless Non-US industry. One other stock in the same industry, Amer Movil (AMX), finished the last trading session 3.2% lower at $19.89. AMX has returned -0.2% over the past month.

Amer Movil's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.43. Compared to the company's year-ago EPS, this represents a change of +186.7%. Amer Movil currently boasts a Zacks Rank of #2 (Buy).

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

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