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Lower NII to Hurt BNY Mellon (BK) Q1 Earnings, Fee Income to Aid
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The Bank of New York Mellon Corporation (BK - Free Report) is scheduled to report first-quarter 2024 results on Apr 16, before market open. The company’s revenues and earnings are expected to have witnessed an increase in the quarter on a year-over-year basis.
In the last reported quarter, BK’s earnings surpassed the Zacks Consensus Estimate. Its results were primarily aided by a rise in net interest revenues (NIR). The assets under management balance witnessed a rise, which, along with higher fee revenues, was another positive.
BNY Mellon has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with a surprise of 10.6%, on average.
The Bank of New York Mellon Corporation Price and EPS Surprise
The consensus estimate for the company’s first-quarter earnings is pegged at $1.19 per share, which has been unchanged over the past seven days. The consensus estimate indicates a rise of 5.3% from the year-ago quarter’s reported number.
The consensus estimate for sales is pegged at $4.38 billion, implying a 0.3% rise from the prior-year quarter’s reported figure.
Key Factors & Estimates for Q1
Fee Revenues: The Zacks Consensus Estimate for total investment services fees (comprising more than 50% of the company’s total revenues) is pegged at $2.25 billion, suggesting a rise of 6.2% from the year-ago quarter’s reported number. Our estimate for the same is pinned at $2.21 billion, indicating a year-over-year rise of 4.2%.
The consensus mark for financing-related fees is pegged at $49.30 million, which suggests a 5.2% year-over-year decline. Our estimate for financing-related fees is $52.9 million.
The consensus estimate for distribution and servicing fees is pegged at $40.40 million, implying a 22.4% rise from the year-ago quarter’s reported figure. Our estimate for the same is pinned at $37 million.
The consensus estimate for foreign exchange revenues is pegged at $148 million, suggesting a decline of 15.9% from the prior-year quarter’s reported figure. Our estimate for the same is pinned at $165.8 million, indicating a 5.8% decline.
The consensus estimate for total fees and other revenues is pegged at $3.36 billion, suggesting a rise of 3.8% from the year-ago quarter’s reported number. We project the metric to be $3.28 billion.
Net Interest Revenues: Given some clarity on the Fed’s interest rate path for the year and high chances of a soft landing of the U.S. economy, the lending scenario improved marginally in the first quarter. Also, the Fed kept interest rates unchanged in the quarter at a 22-year high of 5.25-5.5%.
However, despite decent loan growth and high rates, BNY Mellon’s NIR is expected to have declined in the quarter because of the inverted yield curve and higher funding costs.
The consensus mark for first-quarter NIR is pegged at $1.03 billion, indicating a 9% year-over-year decline. Our estimate for NIR is pinned at $1.01 billion.
Expenses: Because of higher restructuring charges, BNY Mellon’s expenses have been elevated over the past few years. Nevertheless, overall costs are expected to have been manageable in the quarter under review, given the elimination of unnecessary management layers.
Our estimate for first-quarter non-interest expenses is $3.29 billion, suggesting a year-over-year rise of 6.2%.
What the Zacks Model Unveils
According to our quantitative model, BNY Mellon has the right combination of elements to beat on earnings this reporting cycle. It has the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or better — that increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for BNY Mellon is +0.44%.
Zacks Rank: The company currently carries a Zacks Rank of 3.
Other Stocks That Warrant a Look
Per our model, a couple of other finance stocks, which also have the right combination of elements to post an earnings beat this reporting cycle are PNC Financial (PNC - Free Report) and Truist Financial (TFC - Free Report) .
The Earnings ESP for PNC is +0.45% and it carries a Zacks Rank of 3 at present. The company is slated to report first-quarter 2024 results on Apr 16.
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Lower NII to Hurt BNY Mellon (BK) Q1 Earnings, Fee Income to Aid
The Bank of New York Mellon Corporation (BK - Free Report) is scheduled to report first-quarter 2024 results on Apr 16, before market open. The company’s revenues and earnings are expected to have witnessed an increase in the quarter on a year-over-year basis.
In the last reported quarter, BK’s earnings surpassed the Zacks Consensus Estimate. Its results were primarily aided by a rise in net interest revenues (NIR). The assets under management balance witnessed a rise, which, along with higher fee revenues, was another positive.
BNY Mellon has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with a surprise of 10.6%, on average.
The Bank of New York Mellon Corporation Price and EPS Surprise
The Bank of New York Mellon Corporation price-eps-surprise | The Bank of New York Mellon Corporation Quote
The consensus estimate for the company’s first-quarter earnings is pegged at $1.19 per share, which has been unchanged over the past seven days. The consensus estimate indicates a rise of 5.3% from the year-ago quarter’s reported number.
The consensus estimate for sales is pegged at $4.38 billion, implying a 0.3% rise from the prior-year quarter’s reported figure.
Key Factors & Estimates for Q1
Fee Revenues: The Zacks Consensus Estimate for total investment services fees (comprising more than 50% of the company’s total revenues) is pegged at $2.25 billion, suggesting a rise of 6.2% from the year-ago quarter’s reported number. Our estimate for the same is pinned at $2.21 billion, indicating a year-over-year rise of 4.2%.
The consensus mark for financing-related fees is pegged at $49.30 million, which suggests a 5.2% year-over-year decline. Our estimate for financing-related fees is $52.9 million.
The consensus estimate for distribution and servicing fees is pegged at $40.40 million, implying a 22.4% rise from the year-ago quarter’s reported figure. Our estimate for the same is pinned at $37 million.
The consensus estimate for foreign exchange revenues is pegged at $148 million, suggesting a decline of 15.9% from the prior-year quarter’s reported figure. Our estimate for the same is pinned at $165.8 million, indicating a 5.8% decline.
The consensus estimate for total fees and other revenues is pegged at $3.36 billion, suggesting a rise of 3.8% from the year-ago quarter’s reported number. We project the metric to be $3.28 billion.
Net Interest Revenues: Given some clarity on the Fed’s interest rate path for the year and high chances of a soft landing of the U.S. economy, the lending scenario improved marginally in the first quarter. Also, the Fed kept interest rates unchanged in the quarter at a 22-year high of 5.25-5.5%.
However, despite decent loan growth and high rates, BNY Mellon’s NIR is expected to have declined in the quarter because of the inverted yield curve and higher funding costs.
The consensus mark for first-quarter NIR is pegged at $1.03 billion, indicating a 9% year-over-year decline. Our estimate for NIR is pinned at $1.01 billion.
Expenses: Because of higher restructuring charges, BNY Mellon’s expenses have been elevated over the past few years. Nevertheless, overall costs are expected to have been manageable in the quarter under review, given the elimination of unnecessary management layers.
Our estimate for first-quarter non-interest expenses is $3.29 billion, suggesting a year-over-year rise of 6.2%.
What the Zacks Model Unveils
According to our quantitative model, BNY Mellon has the right combination of elements to beat on earnings this reporting cycle. It has the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or better — that increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for BNY Mellon is +0.44%.
Zacks Rank: The company currently carries a Zacks Rank of 3.
Other Stocks That Warrant a Look
Per our model, a couple of other finance stocks, which also have the right combination of elements to post an earnings beat this reporting cycle are PNC Financial (PNC - Free Report) and Truist Financial (TFC - Free Report) .
The Earnings ESP for PNC is +0.45% and it carries a Zacks Rank of 3 at present. The company is slated to report first-quarter 2024 results on Apr 16.
TFC is scheduled to release first-quarter 2024 earnings on Apr 22. The company carries a Zacks Rank of 3 at present and has an Earnings ESP of +0.83%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.