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Legg Mason (LM) to Report Q1 Earnings: A Beat in Store?
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Legg Mason is scheduled to report first-quarter fiscal 2019 (ended Jun 30) results on Jul 25, after the market closes. This asset management company’s performance is expected to reflect a rise in assets under management (AUM).
Though the company’s Q1 AUM (the Zacks Consensus Estimate of $755 billion shows 1.9% year-over-year rise) is anticipated to reflect growth, Legg Mason’s performance fees will likely display a decline. The Zacks Consensus Estimate for performance fees of $25 million reflects a 69.5% slump from the prior-year quarter.
Nonetheless, management expects non-pass through (NPT) performance fees of $10-$15 million in the to-be-reported quarter. Also, pass-through performance fees of Clarion are anticipated to add about $10 million to total GAAP performance fees of $20-$25 million.
However, the Zacks Consensus Estimate for other service revenues of $0.89 million indicates a fall of 21.2% from the last-year quarter. Distribution and service fees are anticipated to be stable year over year at $79 million.
On the cost front, management predicts compensation ratio to remain in the range of 54-56%, highlighting ongoing seasonal impacts. Further, the operating margin is expected to display a slight decrease due to the seasonal expenses and decline in NPT performance fees.
Our proven model indicates that chances of Legg Mason beating the Zacks Consensus Estimate are 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.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is currently pegged at +1.22%. This is a very significant and leading indicator of a likely positive earnings surprise for the company.
Zacks Rank: The combination of Legg Mason’s Zacks Rank #3 and a positive ESP makes us confident of an earnings beat.
The Zacks Consensus Estimate for the April-June quarter’s earnings remained unchanged over the last seven days, calling for year-over-year growth of 18.2%. However, the Zacks Consensus Estimate for sales is projected at $754 million, down 5% year over year.
Stocks That Warrant a Look
Here are some 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 SVB Financial Group is +1.26% and the stock holds a Zacks Rank of 2. The company is scheduled to release second-quarter results on Jul 26. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cullen/Frost Bankers, Inc. (CFR - Free Report) has an Earnings ESP of +0.89% and holds a Zacks Rank of 2. It is slated to report results on Jul 26.
Hilltop Holdings Inc. (HTH - Free Report) has an Earnings ESP of +0.40% and carries a Zacks Rank #3. It is set to report June quarter-end results on Jul 26.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Legg Mason (LM) to Report Q1 Earnings: A Beat in Store?
Legg Mason is scheduled to report first-quarter fiscal 2019 (ended Jun 30) results on Jul 25, after the market closes. This asset management company’s performance is expected to reflect a rise in assets under management (AUM).
Though the company’s Q1 AUM (the Zacks Consensus Estimate of $755 billion shows 1.9% year-over-year rise) is anticipated to reflect growth, Legg Mason’s performance fees will likely display a decline. The Zacks Consensus Estimate for performance fees of $25 million reflects a 69.5% slump from the prior-year quarter.
Nonetheless, management expects non-pass through (NPT) performance fees of $10-$15 million in the to-be-reported quarter. Also, pass-through performance fees of Clarion are anticipated to add about $10 million to total GAAP performance fees of $20-$25 million.
However, the Zacks Consensus Estimate for other service revenues of $0.89 million indicates a fall of 21.2% from the last-year quarter. Distribution and service fees are anticipated to be stable year over year at $79 million.
On the cost front, management predicts compensation ratio to remain in the range of 54-56%, highlighting ongoing seasonal impacts. Further, the operating margin is expected to display a slight decrease due to the seasonal expenses and decline in NPT performance fees.
Legg Mason, Inc. Price and EPS Surprise
Legg Mason, Inc. Price and EPS Surprise | Legg Mason, Inc. Quote
Why a Likely Positive Surprise?
Our proven model indicates that chances of Legg Mason beating the Zacks Consensus Estimate are 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.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is currently pegged at +1.22%. This is a very significant and leading indicator of a likely positive earnings surprise for the company.
Zacks Rank: The combination of Legg Mason’s Zacks Rank #3 and a positive ESP makes us confident of an earnings beat.
The Zacks Consensus Estimate for the April-June quarter’s earnings remained unchanged over the last seven days, calling for year-over-year growth of 18.2%. However, the Zacks Consensus Estimate for sales is projected at $754 million, down 5% year over year.
Stocks That Warrant a Look
Here are some 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 SVB Financial Group is +1.26% and the stock holds a Zacks Rank of 2. The company is scheduled to release second-quarter results on Jul 26. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cullen/Frost Bankers, Inc. (CFR - Free Report) has an Earnings ESP of +0.89% and holds a Zacks Rank of 2. It is slated to report results on Jul 26.
Hilltop Holdings Inc. (HTH - Free Report) has an Earnings ESP of +0.40% and carries a Zacks Rank #3. It is set to report June quarter-end results on Jul 26.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>