What's In The Cards For Zions Stock In Q3 Earnings?

Zions Bancorporation ZION is slated to announce third-quarter 2017 results on Oct 23, after the market closes. Its revenues and earnings are expected to grow year over year.

Driven by an increase in revenues and lower provisions, Zions' second-quarter earnings outpaced the Zacks Consensus Estimate. However, rise in operating expenses was an undermining factor.

Moreover, the company boasts an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average beat of 15%.

However, Zions' activities in the third quarter failed to encourage analysts to revise earnings estimates. As a result, the Zacks Consensus Estimate for earnings of 72 cents for the to-be-reported quarter remained stable over the last seven days. Nevertheless, it reflects a year-over-year improvement of 26.5%.

Also, the Zacks Consensus Estimate for sales of $666.8 million is projected to witness an increase of 8.6% year over year.

Further, the company's price performance has been decent. Its shares have gained 7% year to date, outperforming the industry's growth of 2.6%.

Zions Bancorporation Price and EPS Surprise
 

Zions Bancorporation Price and EPS Surprise | Zions Bancorporation Quote

Will the rally in stock price continue post Q3 earnings release? To a great extent, it depends on the company's ability to maintain its trend of beating earnings estimates. Let's take a look at what our quantitative model predicts.

According to our quantitative model, chances of Zions beating the Zacks Consensus Estimate in the quarter are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — which is needed for increasing 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.

Zacks ESP: The Earnings ESP for Zions is -0.34%.

Zacks Rank: Zions carries a Zacks Rank #3, which increases the predictive power of ESP. However, we also need a positive ESP to be confident of an earnings beat.

Factors to Influence Q3 Results

The third quarter witnessed a moderate improvement in lending, particularly in the areas of commercial and industrial as well as consumer. Thus, loan growth combined with a rise in interest rates should boost the company's NII in the quarter.

Moreover, driven by continued growth in investment securities portfolio as well as benefit from rate hikes, management expects net interest margin to improve in the quarter. Thus, higher margin should further have a positive impact on NII.

Zions has been undertaking a spate of initiatives to control costs. Although its cost-saving efforts are likely to reduce operating expenses to some extent, the company's continued spending on technology systems overhaul and normal salary adjustments will keep overall expenses stable during the quarter.

Stocks that Warrant a Look

Here are a few 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.

Legg Mason, Inc. LM has an Earnings ESP of +0.97% and carries a Zacks Rank of 3. It is scheduled to report results on Oct 25.

Invesco Ltd. IVZ is slated to report results on Oct 26. It has an earnings ESP of +0.65% and a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Lazard Ltd. LAZ has an earnings ESP of +1.39% and a Zacks Rank of 3. It is also slated to report results on Oct 26.

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Zions Bancorporation ZION: Free Stock Analysis Report
 
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