Strength Seen in Ducommun (DCO): Can Its 5.6% Jump Turn into More Strength?

Ducommun (DCO) shares soared 5.6% in the last trading session to close at $121.42. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 14.8% gain over the past four weeks.

Ducommun’s shares likely moved higher as investors remained positive on the company’s long-term defense outlook, supported by steady execution across its missile and radar programs. Strong order momentum and a solid backlog continue to provide good revenue visibility, while progress across key defense platforms has reinforced expectations of stable deliveries and operating performance. These factors have helped balance weakness in the commercial aerospace segment.

Investor sentiment was also supported by Ducommun’s close alignment with U.S. and allied defense priorities, particularly in missile replenishment and advanced radar systems amid ongoing global security concerns. In addition, the company’s expanding customer base and diversified defense exposure have strengthened confidence in its earnings stability, which may have contributed to the stock’s recent gains.

This aerospace industry supplier is expected to post quarterly earnings of $0.91 per share in its upcoming report, which represents a year-over-year change of +21.3%. Revenues are expected to be $217.03 million, up 10% 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 Ducommun, 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 DCO 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 >>>>

Ducommun is a member of the Zacks Aerospace - Defense Equipment industry. One other stock in the same industry, Outdoor Holding Company (POWW), finished the last trading session 2.3% lower at $1.67. POWW has returned -2.8% over the past month.

For Outdoor Holding Company, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.03. This represents a change of +87% from what the company reported a year ago. Outdoor Holding Company currently has a Zacks Rank of #3 (Hold).

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

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