Back to top

Image: Bigstock

Onity (ONIT) Moves 5.2% Higher: Will This Strength Last?

Read MoreHide Full Article

Onity Group (ONIT - Free Report) shares soared 5.2% in the last trading session to close at $32.17. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 9.3% loss over the past four weeks.

Onity Group shares rallied in the second consecutive trading session as cooler December inflation fueled optimism about a potential Fed rate cut. Despite mortgage rates near 7%, lower rates could eventually boost mortgage demand and strengthen the company’s financials, driving bullish sentiment toward ONTY stock.

This mortgage servicer is expected to post quarterly earnings of $2.34 per share in its upcoming report, which represents a year-over-year change of +62.5%. Revenues are expected to be $253.07 million, down 8.7% 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 Onity, the consensus EPS estimate for the quarter has been revised 2.8% 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 ONIT 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 >>>>

Onity belongs to the Zacks Financial - Mortgage & Related Services industry. Another stock from the same industry, Essent Group (ESNT - Free Report) , closed the last trading session 1.9% higher at $57.66. Over the past month, ESNT has returned 3.6%.

For Essent Group, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.67. This represents a change of +1.8% from what the company reported a year ago. Essent Group currently has a Zacks Rank of #4 (Sell).


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Essent Group Ltd. (ESNT) - free report >>

Onity Group Inc. (ONIT) - free report >>

Published in