Texas Capital (TCBI) Surges 5.1%: Is This an Indication of Further Gains?

Texas Capital (TCBI) shares ended the last trading session 5.1% higher at $76.05. 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 0.3% loss over the past four weeks.

Solid job market data has pushed interest rate cut expectations to the later part of the year. Hence, higher interest rates for a longer time are likely to support banks’ net interest income and margin. Hence, investors turned optimistic toward Texas Capital stock, driving it higher.

This holding company for Texas Capital Bank is expected to post quarterly earnings of $1.29 per share in its upcoming report, which represents a year-over-year change of +61.3%. Revenues are expected to be $298.92 million, up 12% 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 Texas Capital, the consensus EPS estimate for the quarter has been revised marginally 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 TCBI 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 >>>>

Texas Capital is part of the Zacks Banks - Southwest industry. Cullen/Frost Bankers (CFR), another stock in the same industry, closed the last trading session 2.3% higher at $129.22. CFR has returned 1.1% in the past month.

For Cullen/Frost

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

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