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Northern Technologies (NTIC) Moves 5.3% Higher: Will This Strength Last?

Northern Technologies (NTIC) shares rallied 5.3% in the last trading session to close at $12.42. 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 1.6% loss over the past four weeks.

Optimism over higher global demand for the company’s products on the back of a broader economic recovery from the pandemic is driving the stock higher. The company is benefiting from strong sales for its Zerust business on the back of higher demand and continued recovery of Natur-Tec sales, aided by the reopening of the economies around the world. Investors also appear to be enthused about the company’s recent contract with BP Exploration (Caspian Sea) Limited to supply chemical corrosion protection services for 12 BP storage tanks through December 2025.

This rust and corrosion prevention company is expected to post quarterly earnings of $0.13 per share in its upcoming report, which represents a year-over-year change of -23.5%. Revenues are expected to be $19.5 million, up 25.7% 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 Northern Technologies, 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 NTIC 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 >>>>

Northern Technologies belongs to the Zacks Chemical - Diversified industry. Another stock from the same industry, Huntsman (HUN), closed the last trading session 2.6% higher at $24.75. Over the past month, HUN has returned -16.2%.

For Huntsman, the consensus EPS estimate for the upcoming report has changed -22.3% over the past month to $0.79. This represents a change of -26.9% from what the company reported a year ago. Huntsman currently has a Zacks Rank of #3 (Hold).

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