NexPoint Residential Trust Inc. (NXRT) Upgraded to Strong Buy: Here's What You Should Know

Core Viewpoint - NexPoint Residential Trust Inc. (NXRT) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Ratings - The Zacks rating system is based on the Zacks Consensus Estimate, which aggregates EPS estimates from sell-side analysts for the current and following years [2]. - The recent upgrade reflects an improvement in NexPoint's earnings outlook, suggesting potential buying pressure and an increase in stock price [4][6]. Impact of Earnings Revisions - Changes in a company's future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements [5]. - Institutional investors often adjust their valuations based on earnings estimates, leading to significant stock price movements when estimates are revised [5]. Performance of Zacks Rank System - The Zacks Rank system classifies 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 upgrade of NexPoint to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [11]. Earnings Estimate Revisions for NexPoint - For the fiscal year ending December 2025, NexPoint is expected to earn $3.24 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 0.7% over the past three months [9].