We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Consumer Loan Stocks' Q3 Earnings Slated on Oct 25: DFS, COF
Read MoreHide Full Article
The earnings season is in full swing, and the investors are keeping a close watch on the companies’ performances. Many companies have come up with better-than-expected third-quarter 2016 results, despite a challenging operating environment.
Per our Earnings Preview report, overall earnings for the Finance sector are expected to grow 14.4% year over year on revenue growth of 1.4%. Notably, during the previous quarter, the sector reflected a 5.2% decline in earnings while revenues improved 1.8%.
The improvement in finance sector indicates a better environment to some extent with positives including rebound in oil prices and continued recovery of the U.S. economy. Further, demand for commercial and industrial and commercial real estate loans along with several consumer loan categories including card and auto remained strong.
Also, an improving housing sector, rebound in oil prices and low default rates should have aided performance of consumer finance companies. Nevertheless, global concerns and a low rate environment adversely affected the performance of the finance sector during the quarter.
Let’s have a look at how our model offers insights into the expected performance of the companies.
Per our quantitative model, in order to be confident of an earnings surprise, a stock needs to have the right combination of the two key criteria – a favorable Zacks Rank – Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) – and a positive Earnings ESP.
Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising with their upcoming earnings announcement. It shows the percentage of difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
Today, we are bringing two major consumer finance stocks that are scheduled to announce their third-quarter results on Oct 25. Notably, both these companies will report after the market closes.
Riverwoods, IL-based Discover Financial Services (DFS - Free Report) is expected to witness loan growth driven by higher sales. Several marketing activities during the quarter are expected to have generated impressive sales volume in savings accounts and balances. However, the company is likely to have witnessed a rise in expenses due to several marketing and business development initiatives undertaken during the quarter. (Read more: Discover Financial Q3 Earnings: What's in the Cards?)
With a Zacks Rank #3 and Earnings ESP of -0.68%, the chances of Discover Financial beating the Zacks Consensus Estimate this time around are low. Notably, Discover Financial surpassed the Zacks Consensus Estimate in three of the trailing four quarters as depicted in the chart below.
Capital One Financial Corporation (COF - Free Report) , based in McLean, VA, is expected to witness a rise in top line driven by improved loan growth. Also, the acquisition of GE Capital’s healthcare finance operation will support revenues. However, operating expenses are expected to remain elevated and higher provisions will likely hurt bottom line. (Read more: Will Higher Expenses Hurt Capital One’s Q3 Earnings?)
With a Zacks Rank #3 and Earnings ESP of -1.03%, the chances of Capital One beating the Zacks Consensus Estimate this time around are low.
Stay tuned! Check back on our full write-up on earnings releases of these two stocks.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Consumer Loan Stocks' Q3 Earnings Slated on Oct 25: DFS, COF
The earnings season is in full swing, and the investors are keeping a close watch on the companies’ performances. Many companies have come up with better-than-expected third-quarter 2016 results, despite a challenging operating environment.
Per our Earnings Preview report, overall earnings for the Finance sector are expected to grow 14.4% year over year on revenue growth of 1.4%. Notably, during the previous quarter, the sector reflected a 5.2% decline in earnings while revenues improved 1.8%.
The improvement in finance sector indicates a better environment to some extent with positives including rebound in oil prices and continued recovery of the U.S. economy. Further, demand for commercial and industrial and commercial real estate loans along with several consumer loan categories including card and auto remained strong.
Also, an improving housing sector, rebound in oil prices and low default rates should have aided performance of consumer finance companies. Nevertheless, global concerns and a low rate environment adversely affected the performance of the finance sector during the quarter.
Let’s have a look at how our model offers insights into the expected performance of the companies.
Per our quantitative model, in order to be confident of an earnings surprise, a stock needs to have the right combination of the two key criteria – a favorable Zacks Rank – Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) – and a positive Earnings ESP.
Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising with their upcoming earnings announcement. It shows the percentage of difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
Today, we are bringing two major consumer finance stocks that are scheduled to announce their third-quarter results on Oct 25. Notably, both these companies will report after the market closes.
Riverwoods, IL-based Discover Financial Services (DFS - Free Report) is expected to witness loan growth driven by higher sales. Several marketing activities during the quarter are expected to have generated impressive sales volume in savings accounts and balances. However, the company is likely to have witnessed a rise in expenses due to several marketing and business development initiatives undertaken during the quarter. (Read more: Discover Financial Q3 Earnings: What's in the Cards?)
With a Zacks Rank #3 and Earnings ESP of -0.68%, the chances of Discover Financial beating the Zacks Consensus Estimate this time around are low. Notably, Discover Financial surpassed the Zacks Consensus Estimate in three of the trailing four quarters as depicted in the chart below.
DISCOVER FIN SV Price and EPS Surprise
DISCOVER FIN SV Price and EPS Surprise | DISCOVER FIN SV Quote
Capital One Financial Corporation (COF - Free Report) , based in McLean, VA, is expected to witness a rise in top line driven by improved loan growth. Also, the acquisition of GE Capital’s healthcare finance operation will support revenues. However, operating expenses are expected to remain elevated and higher provisions will likely hurt bottom line. (Read more: Will Higher Expenses Hurt Capital One’s Q3 Earnings?)
With a Zacks Rank #3 and Earnings ESP of -1.03%, the chances of Capital One beating the Zacks Consensus Estimate this time around are low.
(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)
Also, the company surpassed the Zacks Consensus Estimate in two of the trailing four quarters as depicted in the chart below.
CAPITAL ONE FIN Price and EPS Surprise
CAPITAL ONE FIN Price and EPS Surprise | CAPITAL ONE FIN Quote
Stay tuned! Check back on our full write-up on earnings releases of these two stocks.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>