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Barclays (BCS) Q4 Earnings: What to Expect from the Stock?
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The U.K.-based major global bank, Barclays PLC (BCS - Free Report) is set to announce its fourth-quarter and 2016 results tomorrow, before the opening bell.
Last quarter, Barclays reported improved earnings, reflecting a rebound in bond trading income. Nonetheless, lower revenues (owing to disposal of non-core operations) and a rise in operating expenses acted as headwinds.
Following strong third-quarter performance and gradual improvement in macroeconomic factors, Barclays’ stock witnessed a rise. For the three months ended Dec 31, 2016, the stock jumped more than 36% on the NYSE.
Will Barclays continue to witness improving trends this earnings season? Or will it succumb to revenue pressure? Let's see how things have turned up for this announcement.
Fall in Revenues to Continue: Barclays should continue witnessing a slump in advisory revenues in the quarter, reflecting the significant slowdown in M&As and lower number of IPOs. Also, a persistent low interest rate environment across several major economies should continue hampering interest income growth.
Further, as the bank has been divesting operations, this should hurt the top line (similar to the prior quarters) to some extent. However, trading revenues are likely to show persistent improvement, driven by improved performance in bond and equity trading.
Loan Impairment Charges to Remain High: Loan impairment charges should continue to trend upward in the quarter as consistent global slowdown has led to deterioration in asset quality. Also, exposure in the energy sector loans will likely lead to additional loan impairment charges.
Cost Saving Efforts to Play Savior: Barclays has been on a streamlining spree since the second half of 2016, leading to announcement of divestures of several non-core businesses globally. These initiatives should significantly improve the bank’s operating efficiency and trim costs. Nevertheless, legal and other regulatory expenses are bound to adversely affect Barclays’ bottom line.
Earnings Whispers
Our proven model does not conclusively indicate that Barclays will outpace earnings estimates in the fourth quarter. Note that a stock needs to have both a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher to have a significantly higher chance of beating earnings.
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 Barclays is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 2 cents.
Zacks Rank: Barclays currently holds Zacks Rank #4 (Sell). As it is we caution against stocks with a Zacks Rank #4 or #5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks that Warrant a Look
Here are a few finance stocks you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
The Earnings ESP for EPR Properties (EPR - Free Report) is +0.81% and it has a Zacks Rank #2. The company is slated to report on Feb 28.
Kinsale Capital Group, Inc. (KNSL - Free Report) has an Earnings ESP of +7.69% and a Zacks Rank #3. It is scheduled to report on Mar 1.
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Barclays (BCS) Q4 Earnings: What to Expect from the Stock?
The U.K.-based major global bank, Barclays PLC (BCS - Free Report) is set to announce its fourth-quarter and 2016 results tomorrow, before the opening bell.
Last quarter, Barclays reported improved earnings, reflecting a rebound in bond trading income. Nonetheless, lower revenues (owing to disposal of non-core operations) and a rise in operating expenses acted as headwinds.
Following strong third-quarter performance and gradual improvement in macroeconomic factors, Barclays’ stock witnessed a rise. For the three months ended Dec 31, 2016, the stock jumped more than 36% on the NYSE.
Barclays PLC Price
Barclays PLC Price | Barclays PLC Quote
Factors to Impact Q4 Results
Will Barclays continue to witness improving trends this earnings season? Or will it succumb to revenue pressure? Let's see how things have turned up for this announcement.
Fall in Revenues to Continue: Barclays should continue witnessing a slump in advisory revenues in the quarter, reflecting the significant slowdown in M&As and lower number of IPOs. Also, a persistent low interest rate environment across several major economies should continue hampering interest income growth.
Further, as the bank has been divesting operations, this should hurt the top line (similar to the prior quarters) to some extent. However, trading revenues are likely to show persistent improvement, driven by improved performance in bond and equity trading.
Loan Impairment Charges to Remain High: Loan impairment charges should continue to trend upward in the quarter as consistent global slowdown has led to deterioration in asset quality. Also, exposure in the energy sector loans will likely lead to additional loan impairment charges.
Cost Saving Efforts to Play Savior: Barclays has been on a streamlining spree since the second half of 2016, leading to announcement of divestures of several non-core businesses globally. These initiatives should significantly improve the bank’s operating efficiency and trim costs. Nevertheless, legal and other regulatory expenses are bound to adversely affect Barclays’ bottom line.
Earnings Whispers
Our proven model does not conclusively indicate that Barclays will outpace earnings estimates in the fourth quarter. Note that a stock needs to have both a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher to have a significantly higher chance of beating earnings.
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 Barclays is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 2 cents.
Zacks Rank: Barclays currently holds Zacks Rank #4 (Sell). As it is we caution against stocks with a Zacks Rank #4 or #5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks that Warrant a Look
Here are a few finance stocks you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
VEREIT, Inc. is scheduled to announce results on Feb 23. The company has an Earnings ESP of +5.88% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Earnings ESP for EPR Properties (EPR - Free Report) is +0.81% and it has a Zacks Rank #2. The company is slated to report on Feb 28.
Kinsale Capital Group, Inc. (KNSL - Free Report) has an Earnings ESP of +7.69% and a Zacks Rank #3. It is scheduled to report on Mar 1.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>