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CRE’s recent promotion to Zacks Rank #2 (Buy) signals a bullish earnings trajectory that can enhance your portfolio. The Zacks system bases its ratings on shifts in the consensus EPS estimates issued by sell‑side analysts for the current and upcoming fiscal years. When those estimates climb, the stock’s near‑term price tends to rise, making the rating a practical guide for individual investors who often struggle to interpret Wall Street’s more subjective upgrades.

    The upgrade for Ares Commercial Real Estate therefore reflects a stronger earnings outlook, which institutional traders incorporate into their valuation models. A higher estimate raises the calculated fair value, prompting buying activity that pushes the share price upward. Conversely, a downgrade would trigger selling and a price decline. Thus, the correlation between earnings revisions and short‑term price moves is well documented.

    A rising earnings estimate also signals underlying business improvement, and savvy investors should reward that trend by buying. The Zacks Rank framework, which evaluates four earnings‑related factors to place stocks into five categories—from #1 Strong Buy to #5 Strong Sell—has an audited track record: Rank #1 stocks have delivered an average annual return of 25% since 1988.

    For the current list of Zacks #1 (Strong Buy) stocks, see the link below.