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Can Underwriting Fees Aid Raymond James (RJF) Q1 Earnings?
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Raymond James Financial, Inc. (RJF - Free Report) is scheduled to announce first-quarter fiscal 2018 (ended Dec 31) results tomorrow, after the market closes. Its revenues and earnings are expected to grow year over year.
Improved investment banking drove the company’s fiscal fourth-quarter 2017 earnings, which beat the Zacks Consensus Estimate. This was partially offset by elevated expenses and slowdown in trading activities.
Also, the stock has an impressive earnings surprise history. The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average beat of 8.1%.
Raymond James Financial, Inc. Price and EPS Surprise
Notably, the Zacks Consensus Estimate for the to-be reported quarter earnings of $1.43 has remained stable over the last 30 days. The earnings estimates reflect a year-over-year jump of 33.6%. Also, the Zacks Consensus Estimate for sales of $1.7 billion indicates 14% growth from the prior-year quarter.
Factors to Impact Q1 Results
Rise in underwriting fees: Driven by improving market conditions and chances of continued rise in interest rates in the future, the quarter witnessed an increase in debt issuance. Further, despite being the seasonally weak quarter for equity issuances globally, the quarter is likely to be an exception. Strong rally in the equity markets worldwide might have propelled IPOs and follow-on offerings. So, both debt and equity underwriting fees for Raymond James are likely to improve in the to-be-reported quarter.
Muted advisory fee growth: Weaker M&A activity in terms of deals closed globally, despite a large number of new M&As announced in the quarter, will have a slight adverse effect. So, Raymond James is expected to record a slight rise in advisory fees.
Trading income to fall due to lack of volatility: The quarter continued to witness low volatility in both bond and equity markets and thus trading activities remained sluggish. Also, the fall in trading revenues will primarily be due to comparison with the prior-year quarter that witnessed higher volatility following the U.S. Presidential election results. Therefore, Raymond James will likely report dismal trading revenues.
Loan growth in RJ Bank to support interest income: With stabilizing economy and a rise in demand for loans and improvement in rates, RJ Bank segment is expected to record a jump in interest income.
Expenses to rise: Raymond James is expected to incur integration costs during the quarter as it continues to grow inorganically. Also, as the company persistently hires advisors and invests in franchises, overall expenses are expected to increase.
Earnings Whispers
Our proven model does not conclusively show that Raymond James is likely to beat earnings this time. That’s because it does not have the right combination of two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds 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 Raymond James is 0.00%.
Zacks Rank: Raymond James has a Zacks Rank #2 (Buy), which increases the predictive power of ESP. But we need a positive ESP to be confident of an earnings surprise.
Stocks to Consider
Here are a few finance stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
Legg Mason, Inc. has an Earnings ESP of +0.18% and a Zacks Rank of 2. It is scheduled to announce results on Jan 24.
T. Rowe Price Group, Inc. (TROW - Free Report) has an Earnings ESP of +1.49% and a Zacks Rank of 1. It is scheduled to report results on Jan 30.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Can Underwriting Fees Aid Raymond James (RJF) Q1 Earnings?
Raymond James Financial, Inc. (RJF - Free Report) is scheduled to announce first-quarter fiscal 2018 (ended Dec 31) results tomorrow, after the market closes. Its revenues and earnings are expected to grow year over year.
Improved investment banking drove the company’s fiscal fourth-quarter 2017 earnings, which beat the Zacks Consensus Estimate. This was partially offset by elevated expenses and slowdown in trading activities.
Also, the stock has an impressive earnings surprise history. The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average beat of 8.1%.
Raymond James Financial, Inc. Price and EPS Surprise
Raymond James Financial, Inc. Price and EPS Surprise | Raymond James Financial, Inc. Quote
Notably, the Zacks Consensus Estimate for the to-be reported quarter earnings of $1.43 has remained stable over the last 30 days. The earnings estimates reflect a year-over-year jump of 33.6%. Also, the Zacks Consensus Estimate for sales of $1.7 billion indicates 14% growth from the prior-year quarter.
Factors to Impact Q1 Results
Rise in underwriting fees: Driven by improving market conditions and chances of continued rise in interest rates in the future, the quarter witnessed an increase in debt issuance. Further, despite being the seasonally weak quarter for equity issuances globally, the quarter is likely to be an exception. Strong rally in the equity markets worldwide might have propelled IPOs and follow-on offerings. So, both debt and equity underwriting fees for Raymond James are likely to improve in the to-be-reported quarter.
Muted advisory fee growth: Weaker M&A activity in terms of deals closed globally, despite a large number of new M&As announced in the quarter, will have a slight adverse effect. So, Raymond James is expected to record a slight rise in advisory fees.
Trading income to fall due to lack of volatility: The quarter continued to witness low volatility in both bond and equity markets and thus trading activities remained sluggish. Also, the fall in trading revenues will primarily be due to comparison with the prior-year quarter that witnessed higher volatility following the U.S. Presidential election results. Therefore, Raymond James will likely report dismal trading revenues.
Loan growth in RJ Bank to support interest income: With stabilizing economy and a rise in demand for loans and improvement in rates, RJ Bank segment is expected to record a jump in interest income.
Expenses to rise: Raymond James is expected to incur integration costs during the quarter as it continues to grow inorganically. Also, as the company persistently hires advisors and invests in franchises, overall expenses are expected to increase.
Earnings Whispers
Our proven model does not conclusively show that Raymond James is likely to beat earnings this time. That’s because it does not have the right combination of two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds 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 Raymond James is 0.00%.
Zacks Rank: Raymond James has a Zacks Rank #2 (Buy), which increases the predictive power of ESP. But we need a positive ESP to be confident of an earnings surprise.
Stocks to Consider
Here are a few finance stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
Associated Banc-Corp (ASB - Free Report) is slated to report results on Jan 25. It has an Earnings ESP of +0.64% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Legg Mason, Inc. has an Earnings ESP of +0.18% and a Zacks Rank of 2. It is scheduled to announce results on Jan 24.
T. Rowe Price Group, Inc. (TROW - Free Report) has an Earnings ESP of +1.49% and a Zacks Rank of 1. It is scheduled to report results on Jan 30.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>