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How GS, CMA, NTRS, DFS will Perform this Earnings Season?

With the Q1 earnings season in full swing, you must be keeping an eye on the performance of stocks of major companies and their beats and misses.

Finance, one of the biggest sectors on the S&P 500 index, is in focus now. As of Apr 15, Q1 results from 13 of the 88 finance companies in the S&P 500 have been released. The overall performance is not encouraging, with earnings down 12.4% on a year-over-year basis.

However, the market reacted positively to these results, perhaps because the disappointing performance has already been priced in. Therefore, it is prudent to watch out for finance stocks that will be releasing soon and gain from the price appreciation.

What’s in the Cards for Major Finance Stocks?

Earnings performance of major finance companies – Goldman, Comerica, Northern Trust and Discover Finance – has always interested the investors. Let’s have a look at how these companies will perform when they release their respective first quarter 2016 results tomorrow.

The Goldman Sachs Group, Inc. GS is slated to announce results before the opening bell. The company has a Zacks Rank #4 (Sell) with http://www.zacks.com/earnings/earnings-surprise-predictions/">Earnings ESP of 0.00%, making it difficult to conclusively predict an earnings beat this quarter. Talking about the factors impacting the earnings, the first and foremost is the slump in trading revenues. Additionally, equity underwriting fees should also witness a downtrend. Nevertheless, these are likely to be offset by disciplined expense management and a marginal improvement in net interest income (read more: Will Goldman Disappoint Q1 Earnings on Trading Slump?).

Comerica Incorporated CMA, set to release before the market opens, is expected to be hurt by a significant exposure to the stressed energy sector, leading to a rise in provision for loan losses. Also, higher operating expenses remain a matter of concern, while the top line is likely to extend some support (read more: Will High Energy Provision Hit Comerica Q1 Earnings?).

Northern Trust Corporation NTRS is also less likely to beat the Zacks Consensus Estimate when it reports its results before the market opens. The company has a negative Earnings ESP and Zacks Rank #3 (Hold). Factors to influence results include higher custody, servicing and management fees, lower fee waivers, a slight rise in net interest income and an increase in operating expenses (read more: Can Northern Trust Earnings Beat on Higher Fees?).

Another major finance company, Discover Financial Services DFS is set to release results after the market closes. Similar to the above mentioned stocks, Discover Finance is also not likely to beat the Zacks Consensus Estimate. A rise in expenses and weaker revenues is likely to weigh on its quarterly performance (read more: Discover Financial Q1 Earnings: Will it Disappoint?).

While the overall performance of the finance stocks is not expected to be encouraging, watch out for our full earnings release articles on these stocks.

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COMERICA INC (CMA): Free Stock Analysis Report
 
NORTHERN TRUST (NTRS): Free Stock Analysis Report
 
DISCOVER FIN SV (DFS): Free Stock Analysis Report
 
GOLDMAN SACHS (GS): Free Stock Analysis Report
 
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