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Investment Banking to Aid Raymond James (RJF) Q3 Earnings
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Raymond James (RJF - Free Report) is scheduled to announce third-quarter fiscal 2018 (ended Jun 30) results on Jul 25, after the market closes. Its revenues and earnings are expected to grow year over year.
Improved investment banking drove the company’s fiscal second-quarter earnings, which matched the Zacks Consensus Estimate. This was partially offset by elevated expenses.
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 6%.
Raymond James Financial, Inc. Price and EPS Surprise
Notably, the Zacks Consensus Estimate for the to-be-reported quarter’s earnings of $1.64 has remained stable over the last seven days. The earnings estimates reflect a year-over-year surge of 30.2%. Also, the Zacks Consensus Estimate for sales of $1.82 billion indicates 12.3% growth from the prior-year quarter.
Factors to Influence Q3 Results
Stable underwriting fees: Growth in underwriting fees, consisting of debt and equity underwriting, is expected to be slow. Rising interest rates are likely to have slowed down corporates’ involvement in debt issuances. Thus, debt underwriting fees are not expected to increase much.
Nonetheless, equity issuances globally are expected to get a boost from IPOs and follow-on offerings in the quarter. Thus, equity underwriting fees are anticipated to improve marginally.
Advisory fees to show strength: Global M&A activity in terms of deals closed represents a strong quarter. Thus, this will likely result in an increase in advisory fees. So, Raymond James is will likely gain from the same.
Trading to lend support: Client activity seems to have returned to normalized levels in the to-be-reported quarter, following the significant volatility witnessed in the last quarter. Developments like further escalation in the trade war and some other geo-political tensions were not enough to lead to substantial rise in client activity. Therefore, Raymond James will likely witness a modest rise in trading revenues.
Loan growth in RJ Bank to support interest income: With economic stabilization and a rise in demand for loans and higher rates, RJ Bank segment is expected to record a rise in interest income.
Expenses to rise: Raymond James consistently hires advisors and invests in franchises and thus, overall expenses are expected to increase. Further, regulatory changes and a highly competitive environment will likely lead to a further rise in expenses.
Here is what our quantitative model predicts:
We cannot conclusively predict an earnings beat for Raymond James 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.
Earnings ESP: The Earnings ESP for Raymond James is 0.00%.
Zacks Rank: Raymond James currently has a Zacks Rank #3, which increases the predictive power of the ESP. But we need to have a positive earnings ESP to be sure of the earnings beat.
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:
BankUnited, Inc. (BKU - Free Report) has an Earnings ESP of +0.29% and carries a Zacks Rank of 3. The company is slated to release results on Jul 24.
Hilltop Holdings Inc. (HTH - Free Report) is also slated to release results on Jul 26. It has an Earnings ESP of +0.40% and carries a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Investment Banking to Aid Raymond James (RJF) Q3 Earnings
Raymond James (RJF - Free Report) is scheduled to announce third-quarter fiscal 2018 (ended Jun 30) results on Jul 25, after the market closes. Its revenues and earnings are expected to grow year over year.
Improved investment banking drove the company’s fiscal second-quarter earnings, which matched the Zacks Consensus Estimate. This was partially offset by elevated expenses.
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 6%.
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’s earnings of $1.64 has remained stable over the last seven days. The earnings estimates reflect a year-over-year surge of 30.2%. Also, the Zacks Consensus Estimate for sales of $1.82 billion indicates 12.3% growth from the prior-year quarter.
Factors to Influence Q3 Results
Stable underwriting fees: Growth in underwriting fees, consisting of debt and equity underwriting, is expected to be slow. Rising interest rates are likely to have slowed down corporates’ involvement in debt issuances. Thus, debt underwriting fees are not expected to increase much.
Nonetheless, equity issuances globally are expected to get a boost from IPOs and follow-on offerings in the quarter. Thus, equity underwriting fees are anticipated to improve marginally.
Advisory fees to show strength: Global M&A activity in terms of deals closed represents a strong quarter. Thus, this will likely result in an increase in advisory fees. So, Raymond James is will likely gain from the same.
Trading to lend support: Client activity seems to have returned to normalized levels in the to-be-reported quarter, following the significant volatility witnessed in the last quarter. Developments like further escalation in the trade war and some other geo-political tensions were not enough to lead to substantial rise in client activity. Therefore, Raymond James will likely witness a modest rise in trading revenues.
Loan growth in RJ Bank to support interest income: With economic stabilization and a rise in demand for loans and higher rates, RJ Bank segment is expected to record a rise in interest income.
Expenses to rise: Raymond James consistently hires advisors and invests in franchises and thus, overall expenses are expected to increase. Further, regulatory changes and a highly competitive environment will likely lead to a further rise in expenses.
Here is what our quantitative model predicts:
We cannot conclusively predict an earnings beat for Raymond James 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.
Earnings ESP: The Earnings ESP for Raymond James is 0.00%.
Zacks Rank: Raymond James currently has a Zacks Rank #3, which increases the predictive power of the ESP. But we need to have a positive earnings ESP to be sure of the earnings beat.
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:
BankUnited, Inc. (BKU - Free Report) has an Earnings ESP of +0.29% and carries a Zacks Rank of 3. The company is slated to release results on Jul 24.
SVB Financial Group is slated to report second-quarter 2018 results on Jul 26. It has an Earnings ESP of +1.26% and a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hilltop Holdings Inc. (HTH - Free Report) is also slated to release results on Jul 26. It has an Earnings ESP of +0.40% and carries a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>