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Will BB&T Corp (BBT) be Able to Beat Q1 Earnings Estimates?
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BB&T Corporation is slated to report first-quarter 2017 results on Apr 20, before the opening bell.
Last quarter, BB&T’s earnings were in line with the Zacks Consensus Estimate. Higher revenues as well as stable provisions supported the results. However, higher operating expenses remained a headwind.
Despite an improvement in the rate scenario and investors growing optimism following the Presidential election, BB&T’s price performance remained disappointing in the recently concluded quarter. Shares of the company fell nearly 5% in the three months ended Mar 31, 2017.
However, analysts maintained a neutral stance. As a result, the Zacks Consensus Estimate of 73 cents for the first quarter remained stable in the last 30 days.
Notably, BB&T boasts a decent earnings surprise history, having beaten the Zacks Consensus Estimate in three of the trailing four quarters as is evident from the chart below:
Before we go into a detailed discussion on the factors that are likely to influence the results, let’s check what our quantitative model predicts.
Our proven model cannot conclusively predict whether BB&T will be able to beat the Zacks Consensus Estimate this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #3 (Hold) or better for this to happen.
(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 BB&T is 0.00%. This is because the Most Accurate estimate of 73 cents is in line with the Zacks Consensus Estimate.
Zacks Rank: BB&T’s Zacks Rank #3 increases the predictive power of ESP. But we also need to have a positive Earnings ESP to be confident of an earnings beat.
Factors to Impact Q1 Results
Net Interest Income (NII) to Improve: Loan growth remained weak during the first quarter of 2017. Moreover, management projects average loans in the quarter to be flat or grow marginally on a sequential basis, due to seasonality. However, because of stable securities balances, the company expects earning assets to be up marginally on a sequential basis. Thus, on the basis of an improvement in earning assets along with expectations of higher margins amid an improving rate scenario, NII is anticipated to witness a robust growth.
Further, the company restructured $2.9 billion of federal home loan bank (FHLB) advances in January. According to management, this, along with the rate hike in Dec 2016, favorable asset mix and funding cost, and mix changes, is expected to drive core NIM up by 8–10 bps.
Fee Income to Remain Relatively Flat: Management expects total non-interest income to be relatively flat sequentially as seasonally stronger insurance fee is projected to be offset by seasonal decline in service charges as well as fall in mortgage banking income.
Expenses to Decline Modestly: Excluding merger-related and restructuring charges and the FHLB restructuring charge, BB&T expects expenses to be down slightly on a sequential basis.
Asset Quality to Support Results: BB&T expects loan loss provision to match net charge-offs (NCOs) in addition to providing for incremental loan growth. Also, management expects NCOs to remain in the range of 0.35–0.45%. Non-performing asset levels will likely remain stable sequentially.
Stocks That Warrant a Look
Here are a few finance stocks that you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat in the upcoming announcements.
Zions Bancorporation (ZION - Free Report) has an Earnings ESP of +1.85% and carries a Zacks Rank #3. The company is also slated to release results on Apr 24.
Lazard Ltd (LAZ - Free Report) is scheduled to release results on Apr 27. It has an Earnings ESP of +3.95% and carries a Zacks Rank #2.
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Will BB&T Corp (BBT) be Able to Beat Q1 Earnings Estimates?
BB&T Corporation is slated to report first-quarter 2017 results on Apr 20, before the opening bell.
Last quarter, BB&T’s earnings were in line with the Zacks Consensus Estimate. Higher revenues as well as stable provisions supported the results. However, higher operating expenses remained a headwind.
Despite an improvement in the rate scenario and investors growing optimism following the Presidential election, BB&T’s price performance remained disappointing in the recently concluded quarter. Shares of the company fell nearly 5% in the three months ended Mar 31, 2017.
However, analysts maintained a neutral stance. As a result, the Zacks Consensus Estimate of 73 cents for the first quarter remained stable in the last 30 days.
Notably, BB&T boasts a decent earnings surprise history, having beaten the Zacks Consensus Estimate in three of the trailing four quarters as is evident from the chart below:
BB&T Corporation Price and EPS Surprise
BB&T Corporation Price and EPS Surprise | BB&T Corporation Quote
Earnings Whispers
Before we go into a detailed discussion on the factors that are likely to influence the results, let’s check what our quantitative model predicts.
Our proven model cannot conclusively predict whether BB&T will be able to beat the Zacks Consensus Estimate this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #3 (Hold) or better for this to happen.
(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 BB&T is 0.00%. This is because the Most Accurate estimate of 73 cents is in line with the Zacks Consensus Estimate.
Zacks Rank: BB&T’s Zacks Rank #3 increases the predictive power of ESP. But we also need to have a positive Earnings ESP to be confident of an earnings beat.
Factors to Impact Q1 Results
Net Interest Income (NII) to Improve: Loan growth remained weak during the first quarter of 2017. Moreover, management projects average loans in the quarter to be flat or grow marginally on a sequential basis, due to seasonality. However, because of stable securities balances, the company expects earning assets to be up marginally on a sequential basis. Thus, on the basis of an improvement in earning assets along with expectations of higher margins amid an improving rate scenario, NII is anticipated to witness a robust growth.
Further, the company restructured $2.9 billion of federal home loan bank (FHLB) advances in January. According to management, this, along with the rate hike in Dec 2016, favorable asset mix and funding cost, and mix changes, is expected to drive core NIM up by 8–10 bps.
Fee Income to Remain Relatively Flat: Management expects total non-interest income to be relatively flat sequentially as seasonally stronger insurance fee is projected to be offset by seasonal decline in service charges as well as fall in mortgage banking income.
Expenses to Decline Modestly: Excluding merger-related and restructuring charges and the FHLB restructuring charge, BB&T expects expenses to be down slightly on a sequential basis.
Asset Quality to Support Results: BB&T expects loan loss provision to match net charge-offs (NCOs) in addition to providing for incremental loan growth. Also, management expects NCOs to remain in the range of 0.35–0.45%. Non-performing asset levels will likely remain stable sequentially.
Stocks That Warrant a Look
Here are a few finance stocks that you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat in the upcoming announcements.
Ameriprise Financial, Inc. (AMP - Free Report) is slated to release results on Apr 24. It has an Earnings ESP of +0.79% and carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zions Bancorporation (ZION - Free Report) has an Earnings ESP of +1.85% and carries a Zacks Rank #3. The company is also slated to release results on Apr 24.
Lazard Ltd (LAZ - Free Report) is scheduled to release results on Apr 27. It has an Earnings ESP of +3.95% and carries a Zacks Rank #2.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>