Valmont (VMI) Moves 3.5% Higher: Will This Strength Last?

Valmont Industries (VMI) shares rallied 3.5% in the last trading session to close at $546.81. 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 2.5% gain over the past four weeks.

VMI's gains are supported by solid profitability and earnings performance, as it continues to improve margins through restructuring and productivity initiatives while expanding capacity to meet growing demand. Long-term growth is driven by investments in utility infrastructure, electrification, grid modernization, and data centers, while a strong backlog provides revenue visibility. A rise in earnings guidance further reflects confidence in the company's business outlook. 

This infrastructure equipment maker is expected to post quarterly earnings of $5.76 per share in its upcoming report, which represents a year-over-year change of +18%. Revenues are expected to be $1.09 billion, up 4.1% 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 Valmont, the consensus EPS estimate for the quarter has been revised 0.6% 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 VMI going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Valmont is part of the Zacks Steel - Pipe and Tube industry. Tenaris S.A. (TS), another stock in the same industry, closed the last trading session 1.5% higher at $62.92. TS has returned -1.4% in the past month.

Tenaris' consensus EPS estimate for the upcoming report has changed +1.5% over the past month to $0.81. Compared to the company's year-ago EPS, this represents a change of -18.2%. Tenaris 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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