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BNY Mellon (BK) Adds 2.9% Ahead of Earnings: What To Watch

Shares of BNY Mellon BK added 2.9% during regular hours Wednesday, the last day of trading before the company releases its latest quarterly earnings report. Investors clearly displayed excitement ahead of the report, and with the finance sector’s earnings season starting to wrap up, we will want to keep our eyes on the reaction to this earnings announcement Thursday.

BNY Mellon shares have had an up-and-down year, and the firm has surpassed consensus estimates for earnings in three of the previous four quarters. Higher interest rates, tax cuts, and cost-saving initiatives should continue to drive BNY Mellon’s profitability, but big financials have been stuck in the mud lately, and the bank will really need to impress if it wants to move higher.

According to our latest Zacks Consensus Estimates, analysts expect BNY Mellon to report adjusted earnings of $1.03 per share and revenue of $4.14 billion. These results would represent year-over-year growth of 12% and 5%, respectively.

The Bank of New York Mellon Corporation Price, Consensus and EPS Surprise

The Bank of New York Mellon Corporation Price, Consensus and EPS Surprise | The Bank of New York Mellon Corporation Quote

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Investors should note that BNY Mellon’s consensus earnings projection has trended upward over the duration of the quarter but is now a penny lower than the peak it reached 60 days ago. Estimate revisions have been mixed—a trend that is also reflected in BK’s full-year EPS estimates—and that has kept the stock at a Zacks Rank #3 (Hold) ahead of its report date.

Looking at share price performance, BK has added just over 1% within the past year. The stock is down about 5% in the last month.

A strong earnings beat might be what BK needs in order to start generating more positive momentum. To gauge how likely the company is to outperform estimates tomorrow morning, we can turn to our exclusive Earnings ESP figure.

Zacks Earnings ESP (Expected Surprise Prediction) compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter. The Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change.

This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.

A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.

BK currently has an Earnings ESP of -0.15%. Although its Zacks Rank is within our range, this negative ESP means that our model is not conclusively calling for a beat.

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