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BNY Mellon (BK) Q4 Earnings: Stock to Disappoint this Time?
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The Bank of New York Mellon Corporation (BK - Free Report) is scheduled to report fourth-quarter and 2016 results on Jan 19, before the market opens.
Last quarter, BNY Mellon’s adjusted earnings beat the Zacks Consensus Estimate, driven by higher revenues, a dip in costs and provision benefits. However, lower financing-related fees were an undermining factor.
The earnings beat, Trump-induced rally, the recent Fed rate hike, along with a gradually improving operating environment led to a rise in BNY Mellon’s share price. During the three-month period ended Dec 31, the stock witnessed an increase of 19.4%.
Also, BNY Mellon has a decent earnings surprise history, as evident from the chart below:
Bank Of New York Mellon Corporation (The) Price and EPS Surprise
Will BNY Mellon be able to maintain its earnings streak this quarter? Let’s see how things have shaped up for this earnings release.
On the revenue front, management anticipates net interest revenue to be flat to up slightly during the quarter, on a sequential basis. In addition, the impact of seasonality in the quarter is likely to lead to a rise in overall performance fees, as the quarter represents the end of the measurement period for many of the performance fee-eligible relationships.
However, performance fees in its Investment Management business are estimated to remain flat to slightly down year over year. Further, BNY Mellon expects the revenue related to depositary receipts to fall to approximately $130 million in the soon-to-be-reported quarter on a sequential basis. Therefore, overall non-interest income should remain stable during the quarter.
Moreover, a strengthening U.S. dollar is expected to affect Investment Management revenues owing to its international presence.
On the expense front, the impact of regulatory as well as investment-related expenses should continue to hurt BNY Mellon’s cost base. Nonetheless, overall costs should remain relatively stable in the quarter driven by its cost-saving initiatives.
Earnings Whispers
Our proven model does not conclusively indicate the chances of BNY Mellon beating the Zacks Consensus Estimate this time around, as it does not have the right combination of two key components. Note that a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or at least #3 (Hold) for significantly higher chances of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The Earnings ESP for BNY Mellon is -2.56%. This is because the Most Accurate estimate of 76 cents is below the Zacks Consensus Estimate of 78 cents.
Zacks Rank: BNY Mellon’s Zacks Rank #2 increases the chance of an earnings beat. However, we need to have a positive ESP to be sure of the same.
Nonetheless, BNY Mellon recorded three upward revisions in its earnings estimates (versus one downward revision) over the last 30 days. Further, the Zacks Consensus Estimate for the fourth quarter indicates a year-over-year rise of about 14.5%.
Stocks That Warrant a Look
Here are some stocks worth considering, as they have the right combination of elements to post an earnings beat this quarter.
M&T Bank Corporation (MTB - Free Report) is slated to release results on Jan 19. It has an Earnings ESP of +0.50% and carries a Zacks Rank #3.
KeyCorp (KEY - Free Report) has an Earnings ESP of +6.90% and carries a Zacks Rank #2. The company is slated to release results on Jan 19.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
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BNY Mellon (BK) Q4 Earnings: Stock to Disappoint this Time?
The Bank of New York Mellon Corporation (BK - Free Report) is scheduled to report fourth-quarter and 2016 results on Jan 19, before the market opens.
Last quarter, BNY Mellon’s adjusted earnings beat the Zacks Consensus Estimate, driven by higher revenues, a dip in costs and provision benefits. However, lower financing-related fees were an undermining factor.
The earnings beat, Trump-induced rally, the recent Fed rate hike, along with a gradually improving operating environment led to a rise in BNY Mellon’s share price. During the three-month period ended Dec 31, the stock witnessed an increase of 19.4%.
Also, BNY Mellon has a decent earnings surprise history, as evident from the chart below:
Bank Of New York Mellon Corporation (The) Price and EPS Surprise
Bank Of New York Mellon Corporation (The) Price and EPS Surprise | Bank Of New York Mellon Corporation (The) Quote
Factors to Affect Q4 Results
Will BNY Mellon be able to maintain its earnings streak this quarter? Let’s see how things have shaped up for this earnings release.
On the revenue front, management anticipates net interest revenue to be flat to up slightly during the quarter, on a sequential basis. In addition, the impact of seasonality in the quarter is likely to lead to a rise in overall performance fees, as the quarter represents the end of the measurement period for many of the performance fee-eligible relationships.
However, performance fees in its Investment Management business are estimated to remain flat to slightly down year over year. Further, BNY Mellon expects the revenue related to depositary receipts to fall to approximately $130 million in the soon-to-be-reported quarter on a sequential basis. Therefore, overall non-interest income should remain stable during the quarter.
Moreover, a strengthening U.S. dollar is expected to affect Investment Management revenues owing to its international presence.
On the expense front, the impact of regulatory as well as investment-related expenses should continue to hurt BNY Mellon’s cost base. Nonetheless, overall costs should remain relatively stable in the quarter driven by its cost-saving initiatives.
Earnings Whispers
Our proven model does not conclusively indicate the chances of BNY Mellon beating the Zacks Consensus Estimate this time around, as it does not have the right combination of two key components. Note that a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or at least #3 (Hold) for significantly higher chances of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The Earnings ESP for BNY Mellon is -2.56%. This is because the Most Accurate estimate of 76 cents is below the Zacks Consensus Estimate of 78 cents.
Zacks Rank: BNY Mellon’s Zacks Rank #2 increases the chance of an earnings beat. However, we need to have a positive ESP to be sure of the same.
Nonetheless, BNY Mellon recorded three upward revisions in its earnings estimates (versus one downward revision) over the last 30 days. Further, the Zacks Consensus Estimate for the fourth quarter indicates a year-over-year rise of about 14.5%.
Stocks That Warrant a Look
Here are some stocks worth considering, as they have the right combination of elements to post an earnings beat this quarter.
Commerce Bancshares, Inc. (CBSH - Free Report) is scheduled to report results on Jan 18. It has an Earnings ESP of +1.47% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
M&T Bank Corporation (MTB - Free Report) is slated to release results on Jan 19. It has an Earnings ESP of +0.50% and carries a Zacks Rank #3.
KeyCorp (KEY - Free Report) has an Earnings ESP of +6.90% and carries a Zacks Rank #2. The company is slated to release results on Jan 19.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>