Independent Bank Corp.'s recent upgrade to a Zacks Rank #1 is based on its positive earnings outlook, showing a correlation between earnings estimate revisions and stock price movements. Unlike subjective rating systems, the Zacks rating relies on a consensus measure of EPS estimates to assess a company's changing earnings picture and its impact on stock prices.
Institutional investors play a role in this relationship by using earnings and earnings estimates to evaluate a company's fair value. Their investment decisions based on changes in earnings estimates can lead to subsequent stock price movements. The Zacks ranking system, which categorizes stocks based on earnings estimates, has a track record of success, with Zacks Rank #1 stocks historically yielding an average annual return of +25%.
The upgrade of Independent Bank Corp. to Zacks Rank #1 indicates an improvement in the company's underlying business, which could result in bullish stock price movements. The Zacks rating system, unlike other analyst-driven systems, maintains a balanced proportion of 'buy' and 'sell' ratings, with top-ranked stocks showing superior earnings estimate revision features for potential market outperformance.