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Will Navient's (NAVI) Q3 Earnings Disappoint Investors?
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Navient Corporation (NAVI - Free Report) is scheduled to report third-quarter 2017 results on Oct 17, after the market closes. Both revenues and earnings are expected to decline on a year-over-year basis.
A lawsuit was filed against Navient earlier this month, alleging it of conducting improper lending practices, costing billions of dollars to borrowers. Based on this news, the Zacks Consensus Estimate for to-be-reported quarter has been revised 2% downward to 48 cents over the last seven days, which reflects a year-over-year decline of 3.3%.
Moreover, the company has a weak surprise history. Navient lagged earnings estimates in two of the trailing four quarters, with an average negative surprise of 2.4%.
Higher Legal Expenses: The company’s legal expenses will likely remain elevated due to the lawsuits filed against it in the current year.
Increased Expenses From Investment in Technology: Navient acquired two technologically advanced companies in the to-be-reported quarter, in line with its aim to expand services outside the educational industry. These acquisitions should result in higher expenses.
Easing Margin Pressure: Navient’s prime-indexed assets lag the rise in short-term rates by a quarter. As a result, pressure on net interest margin (NIM) will likely ease based on previous rate hikes.
Moreover, with the acquisition of JPMorgan’s educational loan portfolio, consisting of federally guaranteed student loans and whole private education loans in the previous quarter, NIM is anticipated to be higher.
Let’s have a look at what our quantitative model predicts:
Our proven model doesn’t conclusively show that Navient will be able to beat the Zacks Consensus Estimate this time around, as it does not have the right combination of two key components. Note that a stock with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better has significantly higher chances of beating estimates.
Zacks ESP: The Earnings ESP for Navient is -4.83%.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Navient currently carries a Zacks Rank #4 (Sell).
Stocks That Warrant a Look
Here are some stocks worth considering in the finance space, as they have the right combination of elements to post an earnings beat this quarter.
Santander Consumer USA Holdings Inc.’s Earnings ESP is +6.54% and it carries a Zacks Rank #2 (Buy). The company is expected to release third-quarter results on Oct 27.
Citizens Financial Group, Inc. (CFG - Free Report) has an Earnings ESP of +0.51% and a Zacks Rank of 3. It is scheduled to report third-quarter results on Oct 20.
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Will Navient's (NAVI) Q3 Earnings Disappoint Investors?
Navient Corporation (NAVI - Free Report) is scheduled to report third-quarter 2017 results on Oct 17, after the market closes. Both revenues and earnings are expected to decline on a year-over-year basis.
A lawsuit was filed against Navient earlier this month, alleging it of conducting improper lending practices, costing billions of dollars to borrowers. Based on this news, the Zacks Consensus Estimate for to-be-reported quarter has been revised 2% downward to 48 cents over the last seven days, which reflects a year-over-year decline of 3.3%.
Moreover, the company has a weak surprise history. Navient lagged earnings estimates in two of the trailing four quarters, with an average negative surprise of 2.4%.
Navient Corporation Price and EPS Surprise
Navient Corporation Price and EPS Surprise | Navient Corporation Quote
Factors to Influence Q3 Results
Higher Legal Expenses: The company’s legal expenses will likely remain elevated due to the lawsuits filed against it in the current year.
Increased Expenses From Investment in Technology: Navient acquired two technologically advanced companies in the to-be-reported quarter, in line with its aim to expand services outside the educational industry. These acquisitions should result in higher expenses.
Easing Margin Pressure: Navient’s prime-indexed assets lag the rise in short-term rates by a quarter. As a result, pressure on net interest margin (NIM) will likely ease based on previous rate hikes.
Moreover, with the acquisition of JPMorgan’s educational loan portfolio, consisting of federally guaranteed student loans and whole private education loans in the previous quarter, NIM is anticipated to be higher.
Let’s have a look at what our quantitative model predicts:
Our proven model doesn’t conclusively show that Navient will be able to beat the Zacks Consensus Estimate this time around, as it does not have the right combination of two key components. Note that a stock with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better has significantly higher chances of beating estimates.
Zacks ESP: The Earnings ESP for Navient is -4.83%.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Navient currently carries a Zacks Rank #4 (Sell).
Stocks That Warrant a Look
Here are some stocks worth considering in the finance space, as they have the right combination of elements to post an earnings beat this quarter.
Sallie Mae (SLM - Free Report) has an Earnings ESP of +1.01% and a Zacks Rank of 3. It is slated to report third-quarter results on Oct 18. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Santander Consumer USA Holdings Inc.’s Earnings ESP is +6.54% and it carries a Zacks Rank #2 (Buy). The company is expected to release third-quarter results on Oct 27.
Citizens Financial Group, Inc. (CFG - Free Report) has an Earnings ESP of +0.51% and a Zacks Rank of 3. It is scheduled to report third-quarter results on Oct 20.
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 >>