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What's in the Cards for M&T Bank (MTB) This Earnings Season?

Zacks Equity Research

M&T Bank Corporation MTB is scheduled to report first-quarter 2020 results on Apr 20, before the opening bell. The company’s revenues and earnings are likely to have witnessed a year-over-year decline.

M&T Bank’s fourth-quarter 2019 results surpassed the Zacks Consensus Estimate due to higher fee income and improved loan balance. However, rise in expenses and deteriorating credit metrics were key concerns.

Activities of the company in the to-be-reported quarter were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for earnings of $1.55 has been revised downward over the past 30 days. Also, the figure indicates a 54% fall from the year-ago reported figure.

The consensus estimate for M&T Bank’s revenues for the quarter is pegged at $1.48 billion, which suggests a 4.8% fall from the year-ago reported figure.

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M&T Bank Corporation Price and EPS Surprise

 

M&T Bank Corporation Price and EPS Surprise
M&T Bank Corporation Price and EPS Surprise

M&T Bank Corporation price-eps-surprise | M&T Bank Corporation Quote

Factors at Play

Net Interest Income (NII) Muted: A decent lending scenario, mainly in the areas of commercial and industrial, during the quarter is expected to have supported NII.

However, a decline in interest rates in October 2019 and again in March to near-zero level as a move to protect the economy from the impacts of the coronavirus outbreak are likely to have hurt the company’s net interest margin, thereby, impacting NII. Also, the Zacks Consensus Estimate for the company’s average interest earning assets of $107.4 billion for the first quarter suggests a fall of 2.9% from the prior quarter’s reported number.

Per the consensus estimate, overall NII is expected to fall 5.3% to $956 million on a sequential basis.

Growth in Fee Income Soft: Due to lower mortgage rates, mortgage refinancing activities and fresh originations picked pace in the quarter, as a result of which, M&T Bank is expected to have witnessed higher mortgage banking fees. Also, it is likely to have registered a rise in service charge on deposits, as deposit balance is expected to have increased. However, trust income is estimated to reflect disappointment due to weak markets.

Expenses Rise: While the absence of considerable legal expenses is encouraging, increased investments in technology to improve digital offerings might have escalated costs moderately.

Here is what our quantitative model predicts:

Our quantitative model doesn’t conclusively predict an earnings beat for M&T Bank this time around. The combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better increases the odds of an earnings beat, which is 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: The Earnings ESP for M&T Bank is 0.00%.

Zacks Rank: The company currently carries a Zacks Rank of 5 (Strong Sell).

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 time around.

CURO Group Holdings Corp. CURO is slated to release quarterly results on May 4. The company has an Earnings ESP of +1.47% and currently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Virtu Financial, Inc. VIRT is scheduled to report quarterly earnings on May 7. The company, which sports a Zacks Rank of 1 at present, has an Earnings ESP of +41.57%.

SB ONE BANCORP SBBX is likely to report quarterly earnings soon. The company, which carries a Zacks Rank of 3 at present, has an Earnings ESP of +1.56%.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
M&T Bank Corporation (MTB) : Free Stock Analysis Report
 
Virtu Financial, Inc. (VIRT) : Free Stock Analysis Report
 
SB ONE BANCORP (SBBX) : Free Stock Analysis Report
 
CURO Group Holdings Corp. (CURO) : Free Stock Analysis Report
 
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Zacks Investment Research