Breakout for E-Trade

03/14/2018 5:00 am EST

Focus: FINANCIALS

Leo Fasciocco

Investment Columnist and Publisher, Ticker Tape Digest

E-Trade (ETFC), which provides online brokerage and related products and services primarily to individual retail investors, has broken out from an 8-week, cup-and-handle base, carrying the stock to a 10-year high, asserts technical expert Leo Fasciocco, editor of Ticker Tape Digest.

E-Trade also provides investor-focused banking products, primarily sweep deposits, to retail investors. It provides its services to customers through its digital platforms and network of industry-licensed customer service representatives and financial consultants, over the phone and by e-mail.

The stock's 12-month performance chart shows the stock appreciating 63% versus an 18% gain for the stock market. Its momentum indicator is strongly bullish.

ETFC's long-term chart shows the stock making a bottom in 2012 at $7.08. The stock has since been trending steadily high having made a sixfold move. It has now made a new multi-year high.   

chart

This year, analysts are forecasting a 49% surge in net to $3.26 a share from the $2.19 the year before. Net for the next two quarters will be very strong. For the first quarter, the Street is expecting a 56% jump  in net to 75 cents a share from the 48 cents the year before.The highest estimate on the Street is at 82 cents a share.

Net for the second  quarter is expected to leap 58% to 82 cents a share from 52 cents the year before.  We see good chances for an upside earnings surprise. The company topped the consensus estimate the past four quarters by 2 cents a share, 4 cents, 4 cents and 9 cents.

Looking out to 2019, the Street is currently forecasting a modest 13% increase in net to $3.69 a share from  the anticipated $3.26 this year.

The stock sells with a price-earnings ratio of 17. We see that as attractive for value-growth investors. We are targeting ETFC for a move to $68 within the next few months, or sooner. A protective stop can be placed near $53.

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