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The performance of banking stocks in the second quarter so far reflects a marginal improvement on a sequential basis. Better-than-expected results of some of the big banks indicate a better picture for the industry as a whole.
The concerns in first-quarter 2016 including – global growth worries, lower demand for loans, uncertainty over the timing of the next Fed rate hike, low levels of client activities and volatility in oil prices – impacted the Q2 results as well. Further, the fallout from the Brexit vote added to the woes.
However, banks were better equipped to confront these matters with restructuring and cost saving initiatives. These steps supported bottom line growth and helped the banks in reporting better results.
Per our latest Earnings Preview article, overall earnings for the S&P 500 stocks in the Finance sector are expected to be down 0.4% year over year for the second-quarter 2016. Notably, during the first quarter the sector reflected a 6.9% decline in earnings.
As investors and market watchers are eager to see how the companies will perform in comparison with the market expectations, our model offers some insights into it.
Per our quantitative model, in order to be confident of a positive surprise call, a stock needs to have the right combination of the two key criteria – a favorable Zacks Rank – Zacks Rank #3 (Hold) or better and a positive Earnings ESP.
Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising with their upcoming earnings announcement. It shows the percentage of difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
With Q2 earnings season in full swing, today we will discuss a few of Midwest Banks stocks that are expected to report results tomorrow.
Enterprise Financial Services Corp.’s (EFSC - Free Report) Zacks Consensus Estimate has remained unchanged over the past 30 days. The estimate of 54 cents reflects a growth of 41.23% year over year.
Nonetheless, the company’s Zacks Rank #3 and Earnings ESP of 0.00% make it difficult to conclusively predict the earnings beat for the quarter. Though Zacks Rank #3 increases the predictive power of our model, we also need a positive Earnings ESP to be sure of an earnings beat.
Notably, Enterprise Financial Services boasts a decent surprise history as indicated by the chart below:
The Zacks Consensus Estimate for First Business Financial Services, Inc. (FBIZ - Free Report) remained stable over the past 30 days. The estimate of 50 cents reflects a growth of 12.36% year over year.
Moreover, the company’s Zacks Rank #3 and Earnings ESP of 0.00% make it difficult to conclusively predict the earnings beat for the quarter.
However, First Business Financial’s earnings surprise history doesn’t look good, as indicated from the chart below:
The Zacks Consensus Estimate for Independent Bank Corporation (IBCP - Free Report) remained unchanged over the last 30 days. Further, our estimate of 25 cents per share for the upcoming release indicates a year-over-year growth of about 6.25%.
Further, the company has a Zacks Rank #3 with an Earnings ESP of 0.00%, making it difficult to conclusively predict an earnings beat this quarter.
However, the earnings surprise history for Independent Bank Corporation doesn’t look good as evident from the chart below:
Over the last 30 days, MidWest One Financial Group, Inc.’s (MOFG - Free Report) Zacks Consensus Estimate remained stable. Nevertheless, the estimate of 59 cents indicates a decline of 10.61% on a year over year basis.
Notably, the company has a Zacks Rank #3 with an Earnings ESP of 0.00%, making it difficult to conclusively predict an earnings beat this quarter.
However, MidWest One Financial boasts a decent surprise history as reflected in the chart below:
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Midwest Banks' Q2 Earnings on Jul 28: EFSC, FBIZ, IBCP, MOFG
The performance of banking stocks in the second quarter so far reflects a marginal improvement on a sequential basis. Better-than-expected results of some of the big banks indicate a better picture for the industry as a whole.
The concerns in first-quarter 2016 including – global growth worries, lower demand for loans, uncertainty over the timing of the next Fed rate hike, low levels of client activities and volatility in oil prices – impacted the Q2 results as well. Further, the fallout from the Brexit vote added to the woes.
However, banks were better equipped to confront these matters with restructuring and cost saving initiatives. These steps supported bottom line growth and helped the banks in reporting better results.
Per our latest Earnings Preview article, overall earnings for the S&P 500 stocks in the Finance sector are expected to be down 0.4% year over year for the second-quarter 2016. Notably, during the first quarter the sector reflected a 6.9% decline in earnings.
As investors and market watchers are eager to see how the companies will perform in comparison with the market expectations, our model offers some insights into it.
Per our quantitative model, in order to be confident of a positive surprise call, a stock needs to have the right combination of the two key criteria – a favorable Zacks Rank – Zacks Rank #3 (Hold) or better and a positive Earnings ESP.
Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising with their upcoming earnings announcement. It shows the percentage of difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
With Q2 earnings season in full swing, today we will discuss a few of Midwest Banks stocks that are expected to report results tomorrow.
Enterprise Financial Services Corp.’s (EFSC - Free Report) Zacks Consensus Estimate has remained unchanged over the past 30 days. The estimate of 54 cents reflects a growth of 41.23% year over year.
Nonetheless, the company’s Zacks Rank #3 and Earnings ESP of 0.00% make it difficult to conclusively predict the earnings beat for the quarter. Though Zacks Rank #3 increases the predictive power of our model, we also need a positive Earnings ESP to be sure of an earnings beat.
Notably, Enterprise Financial Services boasts a decent surprise history as indicated by the chart below:
ENTERPRISE FINL Price and EPS Surprise
ENTERPRISE FINL Price and EPS Surprise | ENTERPRISE FINL Quote
The Zacks Consensus Estimate for First Business Financial Services, Inc. (FBIZ - Free Report) remained stable over the past 30 days. The estimate of 50 cents reflects a growth of 12.36% year over year.
Moreover, the company’s Zacks Rank #3 and Earnings ESP of 0.00% make it difficult to conclusively predict the earnings beat for the quarter.
However, First Business Financial’s earnings surprise history doesn’t look good, as indicated from the chart below:
FIRST BUS FINL Price and EPS Surprise
FIRST BUS FINL Price and EPS Surprise | FIRST BUS FINL Quote
The Zacks Consensus Estimate for Independent Bank Corporation (IBCP - Free Report) remained unchanged over the last 30 days. Further, our estimate of 25 cents per share for the upcoming release indicates a year-over-year growth of about 6.25%.
Further, the company has a Zacks Rank #3 with an Earnings ESP of 0.00%, making it difficult to conclusively predict an earnings beat this quarter.
However, the earnings surprise history for Independent Bank Corporation doesn’t look good as evident from the chart below:
INDEP BK MICH Price and EPS Surprise
INDEP BK MICH Price and EPS Surprise | INDEP BK MICH Quote
Over the last 30 days, MidWest One Financial Group, Inc.’s (MOFG - Free Report) Zacks Consensus Estimate remained stable. Nevertheless, the estimate of 59 cents indicates a decline of 10.61% on a year over year basis.
Notably, the company has a Zacks Rank #3 with an Earnings ESP of 0.00%, making it difficult to conclusively predict an earnings beat this quarter.
However, MidWest One Financial boasts a decent surprise history as reflected in the chart below:
MIDWESTONE FINL Price and EPS Surprise
MIDWESTONE FINL Price and EPS Surprise | MIDWESTONE FINL Quote
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>