El Pollo Loco Holdings (LOCO) shares ended the last trading session 9.6% higher at $10.17. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 10.9% loss over the past four weeks.

Shares of El Pollo Loco surged after the company received an unsolicited, non-binding buyout proposal from Biglari Capital. The offer, disclosed in a recent SEC filing, proposes to acquire all outstanding shares of El Pollo Loco. Biglari Capital already owns a notable stake in the restaurant chain. While the offer is still preliminary and subject to negotiation, it has sparked investor interest, reflecting potential confidence in a strategic move that could reshape the company’s future.

This Tex-Mex fast food chain is expected to post quarterly earnings of $0.20 per share in its upcoming report, which represents a year-over-year change of -9.1%. Revenues are expected to be $118.46 million, up 2% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For El Pollo Loco, 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 LOCO 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 >>>>

El Pollo Loco is a member of the Zacks Retail - Restaurants industry. One other stock in the same industry, Potbelly (PBPB), finished the last trading session 7.7% lower at $8.35. PBPB has returned -5.4% over the past month.

Potbelly's consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.02. Compared to the company's year-ago EPS, this represents a change of -300%. Potbelly currently boasts a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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