American Axle (AXL) Moves 9.8% Higher: Will This Strength Last?

American Axle & Manufacturing (AXL) shares rallied 9.8% in the last trading session to close at $7.05. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 4.7% gain over the past four weeks.

American Axle’s shares rose amid the company's strong performance in the driveline unit and frequent business wins. The company’s driveline segment continues to support margins, and as long as heavy-truck programs remain robust, American Axle is well positioned to defend and potentially expand consolidated margins. Recently secured contracts underscore its strength across both electric and internal combustion engine markets.

This maker of auto parts is expected to post quarterly loss of $0.12 per share in its upcoming report, which represents a year-over-year change of -100%. Revenues are expected to be $1.41 billion, up 2.1% 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 American Axle, 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 AXL 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 >>>>

American Axle belongs to the Zacks Automotive - Original Equipment industry. Another stock from the same industry, Hyliion Holdings Corp. (HYLN), closed the last trading session 1% higher at $1.94. Over the past month, HYLN has returned 3.2%.

For Hyliion, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.08. This represents no change from what the company reported a year ago. Hyliion currently has a Zacks Rank of #3 (Hold).

#1 Semiconductor Stock to Buy (Not NVDA)

The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.

One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research