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What's in the Offing for Mr. Cooper (COOP) in Q3 Earnings?

Zacks Equity Research
·3 min read

Mr. Cooper Group Inc. COOP is scheduled to announce third-quarter 2020 results on Oct 29, before market open. Its revenues and earnings are likely to have improved in the quarter on a year-over-year basis.

In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. The results benefited from an increase in revenues and lower expenses.

The Zacks Consensus Estimate for its earnings of $2.69 for the to-be-reported quarter has been revised upward over the past 30 days. Also, the figure indicates growth of 90.8% from the year-ago reported number.

The consensus estimate for sales of $871 million suggests 40.9% growth on a year-over-year basis.

MR. COOPER GROUP INC Price and EPS Surprise

MR. COOPER GROUP INC Price and EPS Surprise
MR. COOPER GROUP INC Price and EPS Surprise

MR. COOPER GROUP INC price-eps-surprise | MR. COOPER GROUP INC Quote

Factors at Play

Rise in Originations: Due to historically low interest rates during the quarter, mortgage refinance volumes are expected to have increased. Also, mortgage originations for the quarter are anticipated to have risen, thereby aiding the top line.

Lower Servicing Revenues: The Fed lowered interest rates to near-zero levels this March in order to support the U.S. economy from the coronavirus-induced slowdown. Thus, the company’s mark-to-market revenues are expected to have declined during the quarter. Also, with increased prepayments, servicing revenues might have fallen in the third quarter.

Controlled Expenses: Mr. Cooper’s efforts to streamline costs and improve efficiency by undertaking corporate actions might have kept expenses under control in the third quarter. Also, the company’s Project Titan, aimed at increasing operational efficiencies, is expected to have provided support. Yet, higher originations might have put some pressure on costs.

Earnings Whispers

Our quantitative model does not predict an earnings beat for Mr. Cooperthis time around. The combination of two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — increases the odds of an earnings beat. But that’s not the case here.

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

Earnings ESP: Mr. Cooper has an Earnings ESP of -1.12%.

Zacks Rank: The company currently carries a Zacks Rank #3.

Stocks That Warrant a Look

Here are a few finance stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.

Moody's Corporation MCO is scheduled to release results on Oct 29. The company currently has an Earnings ESP of +1.93% and a Zacks Rank of 2 (Buy).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Apollo Global Management APO is slated to release earnings figures on Oct 29. The company, which carries a Zacks Rank of 3 at present, has an Earnings ESP of +2.04%.

Janus Henderson Group JHG is set to report quarterly earnings on Oct 29. The company, which sports a Zacks Rank of 1 at present, has an Earnings ESP of +1.81%.

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Moodys Corporation (MCO) : Free Stock Analysis Report
 
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MR. COOPER GROUP INC (COOP) : Free Stock Analysis Report
 
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Zacks Investment Research