The PNC Financial Services Group, Inc (PNC) is expected to generate an increase in year-over-year profits on higher revenues when it releases its results for the quarter ended September 2021. This widely known consensus prospect gives a good idea of the earnings picture, but comparing actual results with those estimates is a powerful factor that could affect its stock price in the short term.
The earnings report, which is expected to be released on October 15, 2021, could help the stock rise if those key numbers are better than expectations. On the other hand, if they run out, the stock may go down.
While management’s discussion of trading conditions when calling for profits will primarily determine the sustainability of the immediate price change and future profit expectations, it is worth having a crippling insight into the chances of a surprise. positive BPA.
Zacks consensus estimate
The company is expected to post quarterly earnings of $ 3.61 per share in its next report, which represents a year-over-year change of + 6.5%.
Revenue is expected to reach $ 5.05 billion, up 17.9% from the previous year quarter.
Trend of estimated revisions
The consensus EPS estimate for the quarter has been revised up 3.77% over the past 30 days to the current level. This essentially reflects how hedge analysts collectively reassessed their initial estimates during this time period.
Investors should be aware that the direction of revisions to estimates by individual hedge analysts may not always be reflected in the overall change.
Price, consensus and EPS Surprise
Whisper of gains
Revisions to estimates before a company’s results are released provide clues to economic conditions for the period in which the results are released. Our exclusive surprise prediction model – the Zacks ESP on earnings (Surprise Prediction Expected) – this idea is at the heart of this idea.
Zacks Earnings ESP compares the most accurate estimate to Zacks’ consensus estimate for the quarter; most accurate estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts who revise their estimates just before the results are released have the latest information, which could potentially be more accurate than they and other consensus contributors predicted earlier.
Thus, a positive or negative ESP reading of earnings theoretically indicates the likely deviation of actual earnings from the consensus estimate. However, the predictive power of the model is only significant for positive ESP readings.
A positive ESP on earnings is a good predictor of a pace of earnings, especially when combined with a Zacks # 1 (strong buy), 2 (buy), or 3 (hold) ranking. Our research shows that actions with this combination produce a positive surprise almost 70% of the time, and a solid Zacks ranking actually increases the predictive power of ESP earnings.
Please note that a negative ESP reading of earnings is not indicative of a shortfall. Our research shows that it is difficult to predict a profit beat with any degree of confidence for stocks with negative earnings ESP readings and / or a Zacks ranking of 4 (sell) or 5 (strong sell).
How have the numbers evolved for The PNC Financial Services Group, Inc?
For The PNC Financial Services Group, Inc, the more accurate estimate is lower than Zacks’ consensus estimate, suggesting that analysts have recently turned bearish on the company’s earnings outlook. This resulted in an ESP on earnings of -0.11%.
On the flip side, the action currently carries a Zacks rank of # 3.
Thus, this combination makes it difficult to predict conclusively that The PNC Financial Services Group, Inc. will beat the consensus EPS estimate.
Does the history of earnings surprises contain a clue?
When calculating estimates of a company’s future earnings, analysts often consider how well it has been able to match past consensus estimates. So it’s worth taking a look at the surprise history to gauge its influence on the upcoming issue.
For the last published quarter, The PNC Financial Services Group, Inc was predicted to post a profit of $ 3.16 per share when it actually produced a profit of $ 4.50, offering a surprise of + 42.41 %.
In the past four quarters, the company has beaten consensus EPS estimates four times.
A gain or failure of gains may not be the only basis for upward or downward action. Many stocks end up losing ground despite declining earnings due to other factors that disappoint investors. Likewise, unforeseen catalysts help a number of stocks win despite a shortfall.
That said, betting on stocks that are expected to exceed profit expectations increases the chances of success. That’s why it’s worth checking out a company’s ESP results and Zacks rankings ahead of its quarterly release. Make sure to use our ESP Income Filter to discover the best stocks to buy or sell before they are published.
PNC Financial Services Group, Inc. does not appear to be a compelling candidate in terms of earnings. However, investors should also pay attention to other factors when betting on this stock or staying on the sidelines before its results are released.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.