What happened

Photronics (NASDAQ:PLAB) investors are having a terrific week.

Yesterday, shares of the semiconductor-manufacturing equipment maker reported Q4 2019 sales that exceeded analyst estimates -- then followed that up with a prediction of another big "beat" on sales in Q1, sending the stock up more than 20%. Today, Photronics stock ran up once again -- as much as 10% earlier in the day and was still up 7.6% at the close.

Man riding a bull up a rising red arrow

Image source: Getty Images.

So what

But if the earnings news is already one-day old, what was behind today's run-up?

It turns out that one analyst firm was so encouraged by Wednesday's earnings news that on Thursday morning, it raised its price target on Photronics stock. The analyst is DA Davidson, and today it raised its price target on Photronics stock by $2, to $18 a share -- prompting investors to follow suit and bid up Photronics past $16.

As the analyst explained in a note covered by TheFly.com today, Photronics is benefiting from ramping up production in China, which is driving sales growth -- now in its ninth consecutive quarter of growth.

Now what

Granted, profits are a bit more problematic -- net income was down more than 22% year over year in Q4 after a 52% drop in Q3. Analysts, however, forecast a return to growth in Q1 2020, and expect earnings to continue growing throughout the year. 

I guess this explains why investors are rushing to get back into Photronics stock this week.