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Mortgage Service Stocks Earnings Preview: JGWE, NSM & More

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The second-quarter 2016 results of finance stocks reported so far reflect a marginal improvement over the prior quarter. The industry backdrop hasn’t improved much,given the continued global growth concerns and low interest rate environment. Further, elevated compliance and monitoring expenses, apart from the continuing regulatory probes, alleviated the pressure on the mortgage service business to some extent.

Per the latest Zacks Earnings Preview report, overall earnings for the S&P 500 stocks in the Finance sector are expected to be down 3.1% year over year. This compares with a 6.9% decline in earnings in the previous quarter.

Our quantitative model offers some insights for stocks that are about to report their earnings. Per the model, in order to be confident of an earnings beat, a stock needs to have the right combination of the two key ingredients, a favorable Zacks Rank – Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) –and a positive Earnings ESP.

Now let’s have a look at the following Mortgage Service stocks that are scheduled to announce their earnings tomorrow.

The J.G. Wentworth Company :The Zacks Consensus Estimate of a loss of 6 cents reflects a year-over-year improvement of 40%. However, we are not confident about an earnings surprise call as the company has the combination of a Zacks Rank #3 and an Earnings ESP of 0.00%.

Notably, estimates have been stable lately, prior to the company’s second-quarter 2016 earnings release.  The company reported positive earnings surprise in one of the trailing four quarters.

JG WENTWORTH CO Price and EPS Surprise

JG WENTWORTH CO Price and EPS Surprise | JG WENTWORTH CO Quote


Nationstar Mortgage Holdings Inc. : Estimates have fallen 11.9% over the last 30 days prior to the company’s second-quarter earnings release. The estimate of 37 cents reflects a growth of 14.1% year over year.

Notably, the company holds a Zacks Rank #5 (Strong Sell) along with an Earnings ESP of -10.81%. Hence, the probability of an earnings beat by the company is almost nil.

Nationstar mortgage reported positive earnings surprise in one of the trailing four quarters, with an average negative surprise of 8.3%.

NATIONSTAR MTGE Price and EPS Surprise

NATIONSTAR MTGE Price and EPS Surprise | NATIONSTAR MTGE Quote


PennyMac Financial Services, Inc. (PFSI - Free Report) : The Zacks Consensus Estimate has declined 10.4% over the past 30 days, prior to the company’s earnings release. This estimate reflects year-over-year growth of 1.3%.

However, the combination of Zacks Rank #3 and an Earnings ESP of -13.33% makes earnings surprise prediction difficult.

Notably, the company recorded an average negative earnings surprise of 14.2% in the trailing four quarters.

PENNYMAC FIN SV Price and EPS Surprise

PENNYMAC FIN SV Price and EPS Surprise | PENNYMAC FIN SV Quote


TPG Specialty Lending, Inc. (TSLX - Free Report) : Estimates have been stable lately, ahead of the release of the company’s second-quarter earnings release. The estimate of 42 cents reflects a year-over-year decline of 9.1%.

The combination of a Zacks Rank #3 with an Earnings ESP of 0.00% makes surprise prediction difficult for this company as well.

Notably, the company reported a nominal average positive surprise in the trailing four quarters.

TPG SPECIALTY Price and EPS Surprise

TPG SPECIALTY Price and EPS Surprise | TPG SPECIALTY Quote


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