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Barclays (BCS) Q1 Earnings: What's in Store for the Stock?
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The U.K.-based major global bank, Barclays PLC (BCS - Free Report) is slated to announce its first-quarter 2017 results on Apr 28, before the opening bell.
Last quarter, Barclays reported improved earnings, reflecting an impressive performance in trading and investment banking. Nonetheless, lower net interest income and a rise in credit impairment charges acted as headwinds.
Notably, despite the improved results and economic stability, Barclays’ shares on NYSE ended the first quarter in red. This seems to reflect uncertainty related to the fallout from the formal announcement of Brexit.
Trading & Investment Banking to Support Revenues: Driven by an improving operating environment and economic stability, the first quarter witnessed an increase in demand for debt and a rise in equity issuance. So, Barclays should have benefited from this upbeat trend and report an increase in underwriting fees in to-be-reported quarter.
Further, in the wake of uncertainty related to policy matters and political changes, global deal making seems to have remained steady, reflecting over 6% rise in global deal value, according to the Thomson Reuters data. Thus, driven by this improved scenario, Barclays is expected to report a rise in advisory fees during the quarter.
Moreover, trading revenues are likely to show persistent improvement, driven by improved performance in bond and equity trading.
However, a persistent low interest rate environment across several major economies should continue hampering interest income growth. Further, as Barclays has been divesting operations, this should hurt the top line (similar to the prior quarters) to some extent.
Rise in Loan Impairment Charges: 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. It announced divestures of several non-core businesses. These initiatives should significantly improve the bank’s operating efficiency and trim costs. Nevertheless, legal and other regulatory expenses are bound to adversely affect its bottom line.
Earnings Whispers
Our proven model does not conclusively indicate that Barclays will outpace earnings estimates in the first 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 22 cents.
Zacks Rank: Barclays currently holds Zacks Rank #2 (Buy), which increases the predictive power of ESP. However, we need a positive ESP to be confident of an earnings surprise.
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:
MB Financial, Inc. has an Earnings ESP of +1.75% and it carries a Zacks Rank #2. The company is slated to release results on Apr 27.
Moody's Corporation (MCO - Free Report) has an Earnings ESP of +4.17% and a Zacks Rank #2. It is scheduled to report results on May 5.
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Barclays (BCS) Q1 Earnings: What's in Store for the Stock?
The U.K.-based major global bank, Barclays PLC (BCS - Free Report) is slated to announce its first-quarter 2017 results on Apr 28, before the opening bell.
Last quarter, Barclays reported improved earnings, reflecting an impressive performance in trading and investment banking. Nonetheless, lower net interest income and a rise in credit impairment charges acted as headwinds.
Notably, despite the improved results and economic stability, Barclays’ shares on NYSE ended the first quarter in red. This seems to reflect uncertainty related to the fallout from the formal announcement of Brexit.
Barclays PLC Price
Barclays PLC Price | Barclays PLC Quote
Factors to Influence Q1 Results
Trading & Investment Banking to Support Revenues: Driven by an improving operating environment and economic stability, the first quarter witnessed an increase in demand for debt and a rise in equity issuance. So, Barclays should have benefited from this upbeat trend and report an increase in underwriting fees in to-be-reported quarter.
Further, in the wake of uncertainty related to policy matters and political changes, global deal making seems to have remained steady, reflecting over 6% rise in global deal value, according to the Thomson Reuters data. Thus, driven by this improved scenario, Barclays is expected to report a rise in advisory fees during the quarter.
Moreover, trading revenues are likely to show persistent improvement, driven by improved performance in bond and equity trading.
However, a persistent low interest rate environment across several major economies should continue hampering interest income growth. Further, as Barclays has been divesting operations, this should hurt the top line (similar to the prior quarters) to some extent.
Rise in Loan Impairment Charges: 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. It announced divestures of several non-core businesses. These initiatives should significantly improve the bank’s operating efficiency and trim costs. Nevertheless, legal and other regulatory expenses are bound to adversely affect its bottom line.
Earnings Whispers
Our proven model does not conclusively indicate that Barclays will outpace earnings estimates in the first 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 22 cents.
Zacks Rank: Barclays currently holds Zacks Rank #2 (Buy), which increases the predictive power of ESP. However, we need a positive ESP to be confident of an earnings surprise.
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:
SVB Financial Group is scheduled to announce results on Apr 27. The company has an Earnings ESP of +0.54% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MB Financial, Inc. has an Earnings ESP of +1.75% and it carries a Zacks Rank #2. The company is slated to release results on Apr 27.
Moody's Corporation (MCO - Free Report) has an Earnings ESP of +4.17% and a Zacks Rank #2. It is scheduled to report results on May 5.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>