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Solid Investment Banking to Aid Evercore (EVR) Q1 Earnings

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Evercore (EVR - Free Report) is slated to announce first-quarter 2021 results on Apr 28, before the opening bell. Its earnings and revenues are expected to have improved year over year.

Strong investment banking performance supported the company’s fourth-quarter 2020 results, which surpassed the Zacks Consensus Estimate. This was partly offset by higher expenses.

It has an impressive earnings surprise history. The company’s earnings surpassed the consensus estimate in each of the trailing four quarters, with the beat being 96.39%, on average.

Evercore Inc Price and EPS Surprise

Evercore Inc Price and EPS Surprise

Evercore Inc price-eps-surprise | Evercore Inc Quote

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings of $2.63 has moved 19% upward over the past 30 days. Earnings estimates suggest substantial growth from the year-ago reported figure. Also, the consensus estimate for sales of $541.4 million indicates 25% increase.

Factors at Play

Higher Underwriting Fees: Given the low rates and the Federal Reserve’s bond purchase program, bond issuance volumes were solid in the quarter. Also, IPO activities remained stellar, and as companies continued to build liquidity amid solid equity market performance, there was a rise in follow-up equity issuances. These are likely to have aided Evercore’s underwriting revenues in the to-be-reported quarter.

Advisory fees to Show Strength: After an impressive second-half 2020 performance, the momentum in the deal making activities continued in the quarter under review as well on the back of extensive vaccination drives, a brighter macroeconomic outlook and lower interest rates. During the first quarter, the number of announced M&As jumped. Though the deal volume didn’t show much improvement, the total value of pending/completed transactions increased drastically.

Also, in light of the pandemic, many companies began business restructuring process with an aim to maintain profitability. This is likely to have boosted Evercore’s advisory fees.

Expenses to Rise: In order to build its segments, Evercore went on a recruitment spree, resulting in an elevation of compensation costs. Thus, costs are likely to have been elevated in the to-be-reported quarter.

Here is what our quantitative model predicts:

Evercore does not has the right combination of the 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 Evercore is 0.00%.

Zacks Rank: The company currently sports a Zacks Rank #1 (Strong Buy).

Stocks Worth a Look

Here are a few finance stocks that you may want to consider, as our model shows that these too 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 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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