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Zions Bancorporation (ZION - Free Report) is scheduled to report first-quarter 2021 results on Apr 19, after market close. Similar to 2020, the overall demand for loans remained soft in the to-be-reported quarter due to the continued slow resumption of business activities. Commercial and industrial loan balances (constituting a large part of Zions’ loan portfolio) witnessed a decline in the quarter.
Moreover, the Zacks Consensus Estimate for the company’s average interest-earning assets for the first quarter of $75.9 billion indicates only a marginal rise from the previous quarter’s reported number.
Thus, owing to muted loan growth along with the near-zero interest rate environment, Zions’ net interest income (NII) — which is its main revenue component — is not expected to have improved in the quarter. The consensus estimate for NII of $545 million indicates a 1% decline sequentially.
Now, let’s have a look at the other key factors that are likely to have impacted Zions’ first-quarter performance.
Fee Revenues: Historically low mortgage rates continued to fuel the demand for new mortgages in the to-be-reported quarter. Relaxed lockdown measures and gradually improving economic conditions are likely to have resulted in prospective homebuyers entering the housing market to take advantage of the low rates. However, as rates gradually increased, refinancing activities are not expected to have been great. Thus, owing to decent mortgage-banking business performance, Zions’ loan sales and servicing income is likely to have been positively impacted in the quarter.
Also, given the easing of lockdown measures, consumer spending witnessed improvement in the quarter. Thus, the company’s card fee is expected to have increased.
However, customer-related fee (accounting for more than 85% of Zions’ total non-interest income) is not likely to have increased in the quarter. The consensus estimate for the same is pegged at $134 million, which indicates a 3.6% decline from the previous quarter’s reported figure.
The consensus estimate for total non-interest income is pegged at $141 million, which indicates a decline of 15.1% on a sequential basis.
Expenses: Zions has been witnessing a persistent rise in operating expenses over the past few years. In fact, as the company continues to invest in franchise, overall costs are expected to have remained elevated in the first quarter as well.
Asset Quality: The Zacks Consensus Estimate for total non-performing loans for the first quarter is pegged at $372 million, suggesting a 1.4% rise from the prior quarter’s reported figure.
What Our Quantitative Model Predicts
According to our quantitative model, the chances of Zions beating the Zacks Consensus Estimate this time are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
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 Zions is -1.00%.
Zacks Rank: The company currently carries a Zacks Rank #3.
The Zacks Consensus Estimate for earnings is pegged at $1.15 per share, which suggests significant growth from the year-ago quarter’s reported number. The estimate has been revised nearly 1% upward over the past seven days.
The consensus estimate for sales is pegged at $690.96 million, which indicates a marginal rise from the prior-year reported figure.
Stocks That Warrant a Look
Here are some finance stocks that you may want to consider as these have the right combination of elements to post an earnings beat in their upcoming releases, per our model.
The Earnings ESP for Invesco (IVZ - Free Report) is +1.21% and it carries a Zacks Rank #2 (Buy) at present. The company is slated to report quarterly numbers on Apr 27.
Capital One Financial Corporation (COF - Free Report) is slated to report quarterly results on Apr 27. The company currently has an Earnings ESP of +1.47% and a Zacks Rank of 3.
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Image: Bigstock
Muted Loan Demand, Low Rates to Hurt Zions' (ZION) Q1 Earnings
Zions Bancorporation (ZION - Free Report) is scheduled to report first-quarter 2021 results on Apr 19, after market close. Similar to 2020, the overall demand for loans remained soft in the to-be-reported quarter due to the continued slow resumption of business activities. Commercial and industrial loan balances (constituting a large part of Zions’ loan portfolio) witnessed a decline in the quarter.
Moreover, the Zacks Consensus Estimate for the company’s average interest-earning assets for the first quarter of $75.9 billion indicates only a marginal rise from the previous quarter’s reported number.
Thus, owing to muted loan growth along with the near-zero interest rate environment, Zions’ net interest income (NII) — which is its main revenue component — is not expected to have improved in the quarter. The consensus estimate for NII of $545 million indicates a 1% decline sequentially.
Now, let’s have a look at the other key factors that are likely to have impacted Zions’ first-quarter performance.
Fee Revenues: Historically low mortgage rates continued to fuel the demand for new mortgages in the to-be-reported quarter. Relaxed lockdown measures and gradually improving economic conditions are likely to have resulted in prospective homebuyers entering the housing market to take advantage of the low rates. However, as rates gradually increased, refinancing activities are not expected to have been great. Thus, owing to decent mortgage-banking business performance, Zions’ loan sales and servicing income is likely to have been positively impacted in the quarter.
Also, given the easing of lockdown measures, consumer spending witnessed improvement in the quarter. Thus, the company’s card fee is expected to have increased.
However, customer-related fee (accounting for more than 85% of Zions’ total non-interest income) is not likely to have increased in the quarter. The consensus estimate for the same is pegged at $134 million, which indicates a 3.6% decline from the previous quarter’s reported figure.
The consensus estimate for total non-interest income is pegged at $141 million, which indicates a decline of 15.1% on a sequential basis.
Expenses: Zions has been witnessing a persistent rise in operating expenses over the past few years. In fact, as the company continues to invest in franchise, overall costs are expected to have remained elevated in the first quarter as well.
Asset Quality: The Zacks Consensus Estimate for total non-performing loans for the first quarter is pegged at $372 million, suggesting a 1.4% rise from the prior quarter’s reported figure.
What Our Quantitative Model Predicts
According to our quantitative model, the chances of Zions beating the Zacks Consensus Estimate this time are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
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 Zions is -1.00%.
Zacks Rank: The company currently carries a Zacks Rank #3.
Zions Bancorporation, N.A. Price and EPS Surprise
Zions Bancorporation, N.A. price-eps-surprise | Zions Bancorporation, N.A. Quote
Q1 Earnings & Sales Growth Expectations
The Zacks Consensus Estimate for earnings is pegged at $1.15 per share, which suggests significant growth from the year-ago quarter’s reported number. The estimate has been revised nearly 1% upward over the past seven days.
The consensus estimate for sales is pegged at $690.96 million, which indicates a marginal rise from the prior-year reported figure.
Stocks That Warrant a Look
Here are some finance stocks that you may want to consider as these have the right combination of elements to post an earnings beat in their upcoming releases, per our model.
BankUnited (BKU - Free Report) is scheduled to release earnings on Apr 22. The company, which carries a Zacks Rank #3 at present, has an Earnings ESP of +0.64%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Earnings ESP for Invesco (IVZ - Free Report) is +1.21% and it carries a Zacks Rank #2 (Buy) at present. The company is slated to report quarterly numbers on Apr 27.
Capital One Financial Corporation (COF - Free Report) is slated to report quarterly results on Apr 27. The company currently has an Earnings ESP of +1.47% and a Zacks Rank of 3.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How to Profit from Trillions on Spending for Infrastructure >>