Federal Signal (US:FSS) ZACKS·2025-12-26 18:01Core Viewpoint - Federal Signal (FSS) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with stock price movements, particularly due to institutional investors adjusting their valuations based on these estimates [4][6]. - For Federal Signal, the increase in earnings estimates and the rating upgrade suggest an improvement in the company's underlying business, likely leading to a rise in stock price [5][10]. Earnings Estimate Revisions - For the fiscal year ending December 2025, Federal Signal is expected to earn $4.15 per share, which remains unchanged from the previous year. However, the Zacks Consensus Estimate has increased by 3.2% over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [7]. - Federal Signal's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].