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.
Will Rally Continue for Zions (ZION) Stock Post Q4 Earnings?
Read MoreHide Full Article
Zions Bancorporation (ZION - Free Report) is slated to report fourth quarter and 2016 results on Monday, Jan 23, after the market closes.
Last quarter, Zions’ earnings beat the Zacks Consensus Estimate, mainly driven by higher revenues. These were partly offset by a rise in provision for loan losses and higher expenses.
The earnings beat along with Trump induced rally translated into improved share price movement for Zions. For the three month-period ended Dec 31, 2016, the stock was up nearly 36.4%.
Further, Zions has a decent surprise history, as indicated from the chart below:
Will improving loan demand support Zions’ top line this earnings season? Or will rising provisions hurt its financials again? Let’s check what our model indicates:
Our proven model does not conclusively show that Zions is likely to beat earnings in the fourth quarter. Note that a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or 2 (Buy) or at least 3 (Hold) to have a significantly higher chance of beating earnings. However, this is not the case as elaborated below:
Zacks ESP: The Earnings ESP for Zions is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 52 cents.
Zacks Rank: Zions sports a Zacks Rank #1. This increases the predictive power of ESP, but we need to have positive Earnings ESP to be sure of earnings beat.
Additionally, Zions’ activities during the quarter were inadequate to win analysts' confidence. Over the last seven days, the Zacks Consensus Estimate remained stable. Notably, the estimates reflect a year-over-year improvement of 21.5%.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Factors to Influence Q4 Results
Revenue Growth to Continue: Management expects net interest income (NII) to trend up, driven by reduction in interest expenses. Also, loan growth, attributable to rise in residential mortgage and non-energy commercial and industrial loans should support the company’s NII.
Further, the company anticipates non-interest income (excluding dividends and securities gains/losses) to remain stable during the quarter, on a sequential basis. So, overall revenues are expected to increase during the quarter.
Moreover, management expects NII to increase in the mid-single-digit to high single-digit range in 2016 (even without an increase in Fed rates), given the continued loan growth.
Stable Expense Base: Driven by benefits from business simplification, Zions should witness a downward trend in operating expenses during the quarter. Nonetheless, as it continues to invest in the franchise, overall operating expenses are likely to remain stable during the quarter.
Management expects non-interest expenses to be below $1.58 billion in 2016 (excluding severance and restructuring expenses).
Provisions to Remain on a Higher Side: Zions’ oil and gas-related exposure (9.6% of net loans as of Sep 30, 2016) remains a matter of concern, despite a rebound in oil prices. Though the company expects energy-related losses to be lower year over year, oilfield services portfolio is likely to hamper significant improvement in asset quality. Hence, overall provisions should remain elevated during the quarter.
Stocks That Warrant a Look
You may want to consider a few finance stocks, as our model shows that these have the right combination of elements to post an earnings beat in the upcoming announcements.
Raymond James Financial, Inc. (RJF - Free Report) has an Earnings ESP of +1.00% and carries a Zacks Rank #2. The company is slated to release results on Jan 25.
T. Rowe Price Group, Inc. (TROW - Free Report) has an Earnings ESP of +2.16% and carries a Zacks Rank #3. It is scheduled to report results on Jan 26.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Will Rally Continue for Zions (ZION) Stock Post Q4 Earnings?
Zions Bancorporation (ZION - Free Report) is slated to report fourth quarter and 2016 results on Monday, Jan 23, after the market closes.
Last quarter, Zions’ earnings beat the Zacks Consensus Estimate, mainly driven by higher revenues. These were partly offset by a rise in provision for loan losses and higher expenses.
The earnings beat along with Trump induced rally translated into improved share price movement for Zions. For the three month-period ended Dec 31, 2016, the stock was up nearly 36.4%.
Further, Zions has a decent surprise history, as indicated from the chart below:
Zions Bancorp Price and EPS Surprise
Zions Bancorp Price and EPS Surprise | Zions Bancorp Quote
Earnings Whispers
Will improving loan demand support Zions’ top line this earnings season? Or will rising provisions hurt its financials again? Let’s check what our model indicates:
Our proven model does not conclusively show that Zions is likely to beat earnings in the fourth quarter. Note that a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or 2 (Buy) or at least 3 (Hold) to have a significantly higher chance of beating earnings. However, this is not the case as elaborated below:
Zacks ESP: The Earnings ESP for Zions is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 52 cents.
Zacks Rank: Zions sports a Zacks Rank #1. This increases the predictive power of ESP, but we need to have positive Earnings ESP to be sure of earnings beat.
Additionally, Zions’ activities during the quarter were inadequate to win analysts' confidence. Over the last seven days, the Zacks Consensus Estimate remained stable. Notably, the estimates reflect a year-over-year improvement of 21.5%.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Factors to Influence Q4 Results
Revenue Growth to Continue: Management expects net interest income (NII) to trend up, driven by reduction in interest expenses. Also, loan growth, attributable to rise in residential mortgage and non-energy commercial and industrial loans should support the company’s NII.
Further, the company anticipates non-interest income (excluding dividends and securities gains/losses) to remain stable during the quarter, on a sequential basis. So, overall revenues are expected to increase during the quarter.
Moreover, management expects NII to increase in the mid-single-digit to high single-digit range in 2016 (even without an increase in Fed rates), given the continued loan growth.
Stable Expense Base: Driven by benefits from business simplification, Zions should witness a downward trend in operating expenses during the quarter. Nonetheless, as it continues to invest in the franchise, overall operating expenses are likely to remain stable during the quarter.
Management expects non-interest expenses to be below $1.58 billion in 2016 (excluding severance and restructuring expenses).
Provisions to Remain on a Higher Side: Zions’ oil and gas-related exposure (9.6% of net loans as of Sep 30, 2016) remains a matter of concern, despite a rebound in oil prices. Though the company expects energy-related losses to be lower year over year, oilfield services portfolio is likely to hamper significant improvement in asset quality. Hence, overall provisions should remain elevated during the quarter.
Stocks That Warrant a Look
You may want to consider a few finance stocks, as our model shows that these have the right combination of elements to post an earnings beat in the upcoming announcements.
SEI Investments Co. (SEIC - Free Report) is scheduled to report results on Jan 25. The company has an Earnings ESP of +6.00% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Raymond James Financial, Inc. (RJF - Free Report) has an Earnings ESP of +1.00% and carries a Zacks Rank #2. The company is slated to release results on Jan 25.
T. Rowe Price Group, Inc. (TROW - Free Report) has an Earnings ESP of +2.16% and carries a Zacks Rank #3. It is scheduled to report results on Jan 26.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>