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Strength Seen in North American Construction (NOA): Can Its 5.4% Jump Turn into More Strength?

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North American Construction (NOA - Free Report) shares rallied 5.4% in the last trading session to close at $16.02. 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 8.8% loss over the past four weeks.

The bullishness in North American Construction’s stock can be attributed to its announcement of a major $2 billion, five-year contract in Queensland, Australia. This substantial deal enhances the company’s long-term project backlog and solidifies its standing as a key player in the mining and heavy construction services space. Primarily operating in Canada, NOA is expanding internationally and is well-regarded for its work in resource-based industries through earthworks, mine management, and site development. The positive market reaction reflects investor confidence in the company’s strengthened growth outlook.

This heavy construction and mining services company is expected to post quarterly earnings of $0.59 per share in its upcoming report, which represents a year-over-year change of +3.5%. Revenues are expected to be $232.61 million, up 15.2% 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 North American Construction, 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 NOA 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 >>>>

North American Construction is a member of the Zacks Oil and Gas - Mechanical and and Equipment industry. One other stock in the same industry, Matrix Service (MTRX - Free Report) , finished the last trading session 3.9% higher at $14.85. MTRX has returned 4% over the past month.

For Matrix Service, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.02. This represents a change of +114.3% from what the company reported a year ago. Matrix Service currently has a Zacks Rank of #3 (Hold).


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