Navient Corporation (NAVI - Free Report) is scheduled to report first-quarter 2021 results on Apr 27, after market close. The company’s earnings as well as revenues are expected to have increased on a year-over-year basis.
This Wilmington, DE-based lender’s fourth-quarter 2020 earnings surpassed the Zacks Consensus Estimate, primarily backed by lower provisions and rise in net interest income. However, private education loans declined. A fall in fee income acted as a headwind.
Notably, the company has an impressive surprise history. Navient outpaced earnings estimates in three of the trailing four quarters, the average earnings surprise being 24.52%.
Activities of the company during the to-be-reported quarter were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for earnings of 78 cents has been unchanged over the past 30 days. Yet, it indicates a rise of 52.94% from the year-ago reported figure. Further, the consensus estimate for sales of $312.10 million indicates a 5.08% year-over-year gain.
Key Factors to Note
Decline in Net Interest Income (“NII”): Per the Fed’s latest data, the overall lending scenario was soft during the January-March quarter, with consumer loan portfolios having offered some support. The primary reason for low loan demand is the sluggish resumption of business activities.
Moreover, interest rates at near-zero level are likely to have hurt Navient’s net interest margin, thereby impacting NII. However, steepening of the yield curve (the difference between short- and long-term interest rates) might have offered some support.
Lower Non-Interest Income: Weakness in fee income might have kept Navient’s top line under pressure in the to-be-reported quarter. The Zacks Consensus Estimate of $53 million for servicing revenues indicates a decline of 8.6% from the previous quarter. The consensus estimate for asset recovery revenues reflects a fall of 1.2%.
Elevated Expenses: Navient’s initiatives to become a technologically-advanced company and its aim to expand services outside the education industry are likely to have resulted in elevated expenses.
Here is what our quantitative model predicts:
Our quantitative model does not conclusively predict an earnings beat for Navient this time around. The combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better increases the odds of an earnings beat, which is not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP for Navient is 0.00%.
Zacks Rank: The company currently carries a Zacks Rank of 3.
Stocks That Warrant a Look
Here are a few bank stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
T. Rowe Price Group (TROW - Free Report) is scheduled to release earnings on Apr 29. The company, which carries a Zacks Rank #2 (Buy) at present, has an Earnings ESP of +0.57%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Earnings ESP for New York Community Bancorp (NYCB - Free Report) is +1.10% and it carries a Zacks Rank #2 at present. The company is slated to report quarterly numbers on Apr 28.
Carlyle Group (CG - Free Report) is slated to report quarterly results on Apr 29. The company currently has an Earnings ESP of +1.46% and a Zacks Rank of 3.
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Navient Corporation (NAVI - Free Report) is scheduled to report first-quarter 2021 results on Apr 27, after market close. The company’s earnings as well as revenues are expected to have increased on a year-over-year basis.
This Wilmington, DE-based lender’s fourth-quarter 2020 earnings surpassed the Zacks Consensus Estimate, primarily backed by lower provisions and rise in net interest income. However, private education loans declined. A fall in fee income acted as a headwind.
Notably, the company has an impressive surprise history. Navient outpaced earnings estimates in three of the trailing four quarters, the average earnings surprise being 24.52%.
Activities of the company during the to-be-reported quarter were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for earnings of 78 cents has been unchanged over the past 30 days. Yet, it indicates a rise of 52.94% from the year-ago reported figure. Further, the consensus estimate for sales of $312.10 million indicates a 5.08% year-over-year gain.
Key Factors to Note
Decline in Net Interest Income (“NII”): Per the Fed’s latest data, the overall lending scenario was soft during the January-March quarter, with consumer loan portfolios having offered some support. The primary reason for low loan demand is the sluggish resumption of business activities.
Moreover, interest rates at near-zero level are likely to have hurt Navient’s net interest margin, thereby impacting NII. However, steepening of the yield curve (the difference between short- and long-term interest rates) might have offered some support.
Lower Non-Interest Income: Weakness in fee income might have kept Navient’s top line under pressure in the to-be-reported quarter. The Zacks Consensus Estimate of $53 million for servicing revenues indicates a decline of 8.6% from the previous quarter. The consensus estimate for asset recovery revenues reflects a fall of 1.2%.
Elevated Expenses: Navient’s initiatives to become a technologically-advanced company and its aim to expand services outside the education industry are likely to have resulted in elevated expenses.
Here is what our quantitative model predicts:
Our quantitative model does not conclusively predict an earnings beat for Navient this time around. The combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better increases the odds of an earnings beat, which is not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP for Navient is 0.00%.
Zacks Rank: The company currently carries a Zacks Rank of 3.
Stocks That Warrant a Look
Here are a few bank stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
T. Rowe Price Group (TROW - Free Report) is scheduled to release earnings on Apr 29. The company, which carries a Zacks Rank #2 (Buy) at present, has an Earnings ESP of +0.57%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Earnings ESP for New York Community Bancorp (NYCB - Free Report) is +1.10% and it carries a Zacks Rank #2 at present. The company is slated to report quarterly numbers on Apr 28.
Carlyle Group (CG - Free Report) is slated to report quarterly results on Apr 29. The company currently has an Earnings ESP of +1.46% and a Zacks Rank of 3.
Zacks' Top Picks to Cash in on Artificial Intelligence
In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.
See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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