The third-quarter earnings season is officially underway, and with estimates coming down substantially heading into the quarter, the profit outlook remains murky at best. A host of mega-banks have reported better-than-expected Q3 earnings thus far, helping to alleviate investor anxiety. And while financials as a whole have been hit hard during the majority of this bear market, there are certain positives when operating in this type of environment.
Banks have really benefitted from interest rates, as rising rates widen the spread between the interest banks earn on loans and the relatively minor interest they pay on deposits. Banks have the ability to take retail deposits and reinvest them in short-term Treasurys to get a much higher risk-free return. And with an aggressive Fed determined to halt lingering inflationary pressures, it’s likely that higher rates will be part of the picture for the foreseeable future.
In terms of earnings estimate revisions which lie at the heart of the Zacks Rank, the Zacks Finance sector is ranked in the top 19% out of all 16 Zacks Ranked Sectors. This means that more companies within this sector are experiencing positive earnings estimate revisions, which we know to be the most powerful force impacting stock prices. Also note the favorable sector valuation characteristics below:
Digging a bit deeper, the Zacks Banks – Southeast industry is currently ranked in the top 7% out of approximately 250 industry groups. Quantitative studies have shown that roughly half of a stock’s future price movement is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
By focusing on top stocks within leading industry groups, we can dramatically improve our odds of success. Let’s take a closer look at a leading stock within this powerful sector and industry combination.
Capital City Bank Group (CCBG - Free Report)
Capital City Bank Group operates as a financial holding company that provides a range of banking services to individual and corporate clients. The company offers lending and financing services, treasury management, merchant credit card processing, checking and savings accounts, and asset management products. CCBG operates through nearly 60 banking offices with over 85 ATMs in the southern United States.
The banking company has exceeded earnings estimates in two of the past four quarters, sporting an average 6.14% beat over that timeframe. The stock has weathered the volatility extremely well this year, with shares advancing nearly 35% - all while the major indices continue to hover in a deep bear market.
A Zacks Rank #2 (Buy) stock, CCBG has also witnessed positive earnings estimate revisions as of late. The outlook for 2023 appears promising, with analysts raising full-year EPS estimates by 4.33% in the past 30 days.
The 2023 Zacks Consensus EPS Estimate now stands at $3.13/share, reflecting growth of 28.67% relative to fiscal 2022. Revenues are anticipated to climb 13.36% to $253.7 million. Make sure to keep an eye on CCBG as the stock continues to outperform.
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The third-quarter earnings season is officially underway, and with estimates coming down substantially heading into the quarter, the profit outlook remains murky at best. A host of mega-banks have reported better-than-expected Q3 earnings thus far, helping to alleviate investor anxiety. And while financials as a whole have been hit hard during the majority of this bear market, there are certain positives when operating in this type of environment.
Banks have really benefitted from interest rates, as rising rates widen the spread between the interest banks earn on loans and the relatively minor interest they pay on deposits. Banks have the ability to take retail deposits and reinvest them in short-term Treasurys to get a much higher risk-free return. And with an aggressive Fed determined to halt lingering inflationary pressures, it’s likely that higher rates will be part of the picture for the foreseeable future.
In terms of earnings estimate revisions which lie at the heart of the Zacks Rank, the Zacks Finance sector is ranked in the top 19% out of all 16 Zacks Ranked Sectors. This means that more companies within this sector are experiencing positive earnings estimate revisions, which we know to be the most powerful force impacting stock prices. Also note the favorable sector valuation characteristics below:
Digging a bit deeper, the Zacks Banks – Southeast industry is currently ranked in the top 7% out of approximately 250 industry groups. Quantitative studies have shown that roughly half of a stock’s future price movement is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
By focusing on top stocks within leading industry groups, we can dramatically improve our odds of success. Let’s take a closer look at a leading stock within this powerful sector and industry combination.
Capital City Bank Group (CCBG - Free Report)
Capital City Bank Group operates as a financial holding company that provides a range of banking services to individual and corporate clients. The company offers lending and financing services, treasury management, merchant credit card processing, checking and savings accounts, and asset management products. CCBG operates through nearly 60 banking offices with over 85 ATMs in the southern United States.
The banking company has exceeded earnings estimates in two of the past four quarters, sporting an average 6.14% beat over that timeframe. The stock has weathered the volatility extremely well this year, with shares advancing nearly 35% - all while the major indices continue to hover in a deep bear market.
A Zacks Rank #2 (Buy) stock, CCBG has also witnessed positive earnings estimate revisions as of late. The outlook for 2023 appears promising, with analysts raising full-year EPS estimates by 4.33% in the past 30 days.
The 2023 Zacks Consensus EPS Estimate now stands at $3.13/share, reflecting growth of 28.67% relative to fiscal 2022. Revenues are anticipated to climb 13.36% to $253.7 million. Make sure to keep an eye on CCBG as the stock continues to outperform.
Free Report: Must-See Energy Stocks for 2023
Record profits at oil companies can mean big gains for you. With soaring demand and elevated prices, oil stocks could be top performers by far in 2023. Zacks has released a special report revealing the 4 oil stocks experts believe will deliver the biggest gains. (You’ll never guess Stock #2!)
Download Oil Market on Fire today, absolutely free.
Get the latest research report on CCBG - FREE