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People's United (PBCT) to Post Q4 Earnings: A Beat in Store?
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People's United Financial, Inc. is scheduled to report fourth-quarter 2017 results on Jan 18. Both revenues and earnings are anticipated to grow year over year, with likely earnings beat on the cards.
Before we discuss why an earnings beat is likely and what could influence the results, let’s take a look at how the company performed in the last quarter.
Driven by higher revenues and lower provisions, People's United reported a positive earnings surprise of 4% in third-quarter 2017. Further, elevated loans and deposits balances were tailwinds. However, escalating expenses was the undermining factor.
Notably, People's United delivered positive earnings surprises in two of the four trailing quarters, with an average beat of 2.09%.
People's United Financial, Inc. Price and EPS Surprise
Regarding the stock’s performance, shares of the company have gained around 3.1% for the three-month period ended Dec 31, 2017, outperforming growth of 2.6% recorded by the industry.
Will the upcoming earnings release give a boost to People's United’s stock? This depends largely on whether the firm is able to post a beat in the fourth quarter. Notably, our quantitative model predicts a likely earnings beat this time. Here’s why:
Our proven model indicates that chances of People's United beating the Zacks Consensus Estimate is high as it has the right combination of the two key ingredients — positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold).
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at +0.61%. This is a very significant and leading indicator of a likely positive earnings surprise for the company.
Zacks Rank: The combination of People's United’s Zacks Rank #2 and a positive ESP makes us confident of an earnings beat.
The Zacks Consensus Estimate for the to-be-reported quarter remained unchanged over the last seven days and is expected to move up 12.5% year over year. Moreover, the Zacks Consensus Estimate for sales is projected at $392.7 million, up 18.6% year over year.
Factors to Influence Q4 Results
Loan Growth: Per the Federal Reserve’s latest data, loans declined on a sequential basis during the December-end quarter. Particularly, growth in consumer loans, with slowdown in real estate loans, along with commercial and industrial (C&I) loans, is expected. Therefore, interest income for banks is projected to improve marginally.
In addition, management’s expectations of loan and deposit growth in 2017 will likely be reflected in this quarter. Management projects loan portfolio to grow in the range of 11-13%.
Modest Rise in Net Interest Income (NII): Given the influence of rise in interest rates, People's United is anticipated to have recorded an increase in NII. Notably, management’s projections of 2017 NII to grow in the range of 12-14% is likely to show impact in the quarter to be reported as well.
Fee Income to Escalate: On strong retail banking, fee income might escalate for the bank. Additionally, the company projects non-interest income to rise in the range of 5-7% in 2017, the impact of which is likely to be reflected in the to-be-reported quarter.
Increase in Expenses: Despite undertaking a number of expense-saving initiatives, People’s United’s operating expenses have witnessed an elevated level. Though the company is focused on optimizing its branch network and has initiated installation of technology to improve efficiencies and reduce costs, escalating expense levels are likely to limit bottom-line expansion.
Adverse impact of new tax code: The tax reform might result in elevated operating expenses from one-time bonus payments, higher charitable contributions and investment losses from securities portfolio restructurings. Also, though the company has not provided any information about the write-down of deferred tax assets (DTAs), it might record a significant one-time charge in the fourth quarter.
Stocks That Warrant a Look
Here are some other stocks you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.
The Earnings ESP for Legg Mason, Inc. is +0.18% and the stock flaunts a Zacks Rank of 1 (Strong Buy). The company is scheduled to release December quarter-end results on Jan 24. You can seethe complete list of today’s Zacks #1 Rank stocks here.
T. Rowe Price Group, Inc. (TROW - Free Report) is slated to release results on Jan 30. The company has an Earnings ESP of +1.31% and sports a Zacks Rank of 1.
SunTrust Banks, Inc. (STI - Free Report) has an Earnings ESP of +0.81% and carries a Zacks Rank of 2. It is scheduled to report results on Jan 19.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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People's United (PBCT) to Post Q4 Earnings: A Beat in Store?
People's United Financial, Inc. is scheduled to report fourth-quarter 2017 results on Jan 18. Both revenues and earnings are anticipated to grow year over year, with likely earnings beat on the cards.
Before we discuss why an earnings beat is likely and what could influence the results, let’s take a look at how the company performed in the last quarter.
Driven by higher revenues and lower provisions, People's United reported a positive earnings surprise of 4% in third-quarter 2017. Further, elevated loans and deposits balances were tailwinds. However, escalating expenses was the undermining factor.
Notably, People's United delivered positive earnings surprises in two of the four trailing quarters, with an average beat of 2.09%.
People's United Financial, Inc. Price and EPS Surprise
People's United Financial, Inc. price-eps-surprise | People's United Financial, Inc. Quote
Regarding the stock’s performance, shares of the company have gained around 3.1% for the three-month period ended Dec 31, 2017, outperforming growth of 2.6% recorded by the industry.
Will the upcoming earnings release give a boost to People's United’s stock? This depends largely on whether the firm is able to post a beat in the fourth quarter. Notably, our quantitative model predicts a likely earnings beat this time. Here’s why:
Our proven model indicates that chances of People's United beating the Zacks Consensus Estimate is high as it has the right combination of the two key ingredients — positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold).
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at +0.61%. This is a very significant and leading indicator of a likely positive earnings surprise for the company.
Zacks Rank: The combination of People's United’s Zacks Rank #2 and a positive ESP makes us confident of an earnings beat.
The Zacks Consensus Estimate for the to-be-reported quarter remained unchanged over the last seven days and is expected to move up 12.5% year over year. Moreover, the Zacks Consensus Estimate for sales is projected at $392.7 million, up 18.6% year over year.
Factors to Influence Q4 Results
Loan Growth: Per the Federal Reserve’s latest data, loans declined on a sequential basis during the December-end quarter. Particularly, growth in consumer loans, with slowdown in real estate loans, along with commercial and industrial (C&I) loans, is expected. Therefore, interest income for banks is projected to improve marginally.
In addition, management’s expectations of loan and deposit growth in 2017 will likely be reflected in this quarter. Management projects loan portfolio to grow in the range of 11-13%.
Modest Rise in Net Interest Income (NII): Given the influence of rise in interest rates, People's United is anticipated to have recorded an increase in NII. Notably, management’s projections of 2017 NII to grow in the range of 12-14% is likely to show impact in the quarter to be reported as well.
Fee Income to Escalate: On strong retail banking, fee income might escalate for the bank. Additionally, the company projects non-interest income to rise in the range of 5-7% in 2017, the impact of which is likely to be reflected in the to-be-reported quarter.
Increase in Expenses: Despite undertaking a number of expense-saving initiatives, People’s United’s operating expenses have witnessed an elevated level. Though the company is focused on optimizing its branch network and has initiated installation of technology to improve efficiencies and reduce costs, escalating expense levels are likely to limit bottom-line expansion.
Adverse impact of new tax code: The tax reform might result in elevated operating expenses from one-time bonus payments, higher charitable contributions and investment losses from securities portfolio restructurings. Also, though the company has not provided any information about the write-down of deferred tax assets (DTAs), it might record a significant one-time charge in the fourth quarter.
Stocks That Warrant a Look
Here are some other stocks you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.
The Earnings ESP for Legg Mason, Inc. is +0.18% and the stock flaunts a Zacks Rank of 1 (Strong Buy). The company is scheduled to release December quarter-end results on Jan 24. You can seethe complete list of today’s Zacks #1 Rank stocks here.
T. Rowe Price Group, Inc. (TROW - Free Report) is slated to release results on Jan 30. The company has an Earnings ESP of +1.31% and sports a Zacks Rank of 1.
SunTrust Banks, Inc. (STI - Free Report) has an Earnings ESP of +0.81% and carries a Zacks Rank of 2. It is scheduled to report results on Jan 19.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>