Core Viewpoint - Farmers National Banc (FMNB) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Revisions - The Zacks rating system is based on the Zacks Consensus Estimate, which reflects EPS estimates from sell-side analysts for the current and following years [2]. - For the fiscal year ending December 2024, Farmers National is expected to earn $1.37 per share, representing a -17% change from the previous year's reported number [9]. - Over the past three months, the Zacks Consensus Estimate for Farmers National has increased by 3.8% [9]. Impact of Institutional Investors - Changes in a company's future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements, largely due to institutional investors who adjust their valuations based on these estimates [5]. - An increase in earnings estimates typically leads to higher fair value calculations for stocks, prompting institutional investors to buy or sell accordingly, which in turn affects stock prices [5]. Zacks Rating System - The Zacks Rank stock-rating system categorizes stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. - The Zacks rating system maintains a balanced distribution of 'buy' and 'sell' ratings, ensuring that only the top 5% of stocks receive a 'Strong Buy' rating, indicating superior earnings estimate revisions [10][11]. Conclusion - The upgrade of Farmers National to a Zacks Rank 1 positions it among the top 5% of Zacks-covered stocks, suggesting potential for upward movement in stock price in the near term [11].
What Makes Farmers National (FMNB) a New Strong Buy Stock