Banco Santander-Chile (BSAC) Soars 5.0%: Is Further Upside Left in the Stock?

Banco Santander-Chile BSAC shares soared 5% in the last trading session to close at $33.4. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 3.6% loss over the past four weeks.

Supported by a more constructive macro and earnings outlook for Chilean banks, the rating outlook for BSAC was upgraded by both JPMorgan and BofA Securities. The upgrades were driven by expectations that inflation-linked assets (especially mortgages) will continue supporting net interest income, while funding costs stabilize, improving margins. This, along with an overall positive broader market sentiment drove the BSAC stock higher in last day's trading session.

This financial holding company is expected to post quarterly earnings of $0.64 per share in its upcoming report, which represents a year-over-year change of +4.9%. Revenues are expected to be $830.2 million, up 16.3% 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 Banco Santander-Chile, the consensus EPS estimate for the quarter has been revised 3.2% 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 BSAC 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 >>>>

Banco Santander-Chile is part of the Zacks Banks - Foreign industry. Nu Holdings Ltd. NU, another stock in the same industry, closed the last trading session 6.4% higher at $14.37. NU has returned -11.1% in the past month.

For Nu , the consensus EPS estimate for the upcoming report has changed +2.6% over the past month to $0.2. This represents a change of +66.7% from what the company reported a year ago. Nu 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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