Will It Continue to Soar?

Revlon (REV) shares ended the last trading session 62.5% higher at $6.06. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock’s 6.1% loss over the past four weeks.

Shares of Revlon got a boost on reports suggesting that Reliance Industries Ltd. Is considering a takeover offer for the former, which is currently battling several financial hurdles. In fact, Revlon recently unveiled that some of its subsidiaries have filed petitions for reorganization, under Chapter 11 in the US Bankruptcy Court.

This beauty products maker is expected to post quarterly loss of $1.31 per share in its upcoming report, which represents a year-over-year change of -29.7%. Revenues are expected to be $507.3 million, up 2% 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 Revlon, 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 REV 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 >>>>

Revlon belongs to the Zacks Cosmetics industry. Another stock from the same industry, Inter Parfums (IPAR), closed the last trading session 4% higher at $69.02. Over the past month, IPAR has returned -6.8%.

Inter Parfums’ consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.73. Compared to the company’s year-ago EPS, this represents a change of +2.8%. Inter Parfums currently boasts a Zacks Rank of #3 (Hold).

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