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Weak Investment Banking to Mar Evercore's (EVR) Q1 Earnings

Zacks Equity Research

Evercore EVR is scheduled to report first-quarter 2019 results on Apr 24, before the opening bell. The company’s earnings are expected to decline on a year-over-year basis.

Notably, it has an impressive earnings surprise history. It topped earnings in each of the trailing four quarters, the average positive earnings surprise being 36.8%.

In the last reported quarter, the bank’s earnings surpassed the Zacks Consensus Estimate by 71%. Results were supported by increase in advisory fees, higher assets under management and a strong liquidity position. However, rise in expenses was an undermining factor.

Evercore Inc Price and EPS Surprise

Evercore Inc Price and EPS Surprise | Evercore Inc Quote

However, Evercore’s activities in the first quarter were inadequate to impress analysts. As a result, the Zacks Consensus Estimate for earnings of $1.59 remained unchanged over the past seven days. Also, it indicates a decline of 29% from the year-ago reported figure.

Before we take a look at what our quantitative model predicts, let’s check the factors that are expected to impact first-quarter results.

Factors at Play

Muted Underwriting Fees: Prolonged government shutdown at the beginning of the quarter and fears of economic slowdown weighed on companies’ plans to raise capital by issuing shares. Thus, growth in Evercore’s equity underwriting fees is expected to be muted.

Further, higher interest rates are likely to have slowed down companies’ involvement in debt issuance activities. Nonetheless, the Fed’s dovish stance on future rate hikes must have led to a slight increase in debt issuances during the quarter.

Advisory Fees Might Decline: While dealmakers across the globe were active during the first quarter, global deal value and volume declined on higher borrowing costs and several geopolitical concerns. So, Evercore is likely to report a fall in advisory fees.

Expenses Might Rise: Evercore’s efforts to build its business profile might keep expenses elevated.

Here is what our quantitative model predicts:

Evercore doesn’t have the right combination of the two key ingredients — positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The company has an Earnings ESP of 0.00%.

Zacks Rank: It carries a Zacks Rank #3, which increases the predictive power of ESP. But we need to have positive Earnings ESP to be sure of an earnings beat.

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.

SVB Financial Group SIVB has an Earnings ESP of +0.42% and has a Zacks Rank of 3 at present. It is slated to report results on Apr 25.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Earnings ESP for BankUnited BKU is +1.89% and it carries a Zacks Rank of 3, currently. The company is set to report quarterly numbers on Apr 24.

Associated Banc-Corp ASB is scheduled to release results on Apr 25. It presently has an Earnings ESP of +0.55% and a Zacks Rank #3.

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BankUnited, Inc. (BKU) : Free Stock Analysis Report
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