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Market News and Data brought to you by Benzinga APIs

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Huntington Bancshares Incorporated HBAN is slated to report third-quarter 2024 results results on Oct. 17, before the opening bell. The company’s quarterly revenues and earnings are expected to have declined year over year.

In the last reported quarter, the bank recorded a positive earnings surprise of 7.14%. Results have reflected improvements in average loans and deposits. However, a fall in net interest income (NII) and elevated expenses were headwinds.

HBAN has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 8.87%.

The Zacks Consensus Estimate for HBAN’s third-quarter earnings of 30 cents per share has remained unchanged in the past seven days. The figure indicates a 16.67% decline from the year-ago reported number.

The consensus estimate for revenues is pegged at $1.86 billion, indicating a year-over-year decline of 1.67%.

Key Factors & Estimates for HBAN’s Q3 Result

Loans & NII: On Sept. 18, the Federal Reserve cut the interest rates by 50 basis points to 4.75-5% for the first time since March 2020. While the rate cut is not expected to significantly affect HBAN’s NII in the quarter under review, greater clarity on the Fed’s rate cut path, along with a stabilizing macroeconomic environment, is likely to have aided the lending outlook.

The Zacks Consensus Estimate for NII is pegged at $1.35 billion, indicating a 3% rise sequentially.

Per the Fed’s latest data, the demand for commercial and industrial loans and consumer loans was decent in the third quarter of 2024, while real estate loan was subdued.

Given the company’s significant exposure to commercial loans, HBAN’s lending book is likely to have been supported by the decent demand in commercial loans while the subdued real estate loan demand might have offset growth to some extent.

The Zacks Consensus Estimate for average total earning assets of $180.5 billion for the quarter under review indicates a 1.4% rise from the prior quarter’s levels.

Non-Interest Income: As the central bank lowered the interest rates, mortgage rates started to come down. The rates declined to almost 6.2% by the end of the third quarter. Although mortgage origination volume remained subdued in the quarter under review, refinancing activities witnessed a significant surge supported by lower mortgage rates. This is likely to have supported HBAN’s mortgage banking fees. The Zacks Consensus Estimate for mortgage banking income is pegged at $30.6 million, suggesting a 1.8% increase from the prior quarter’s reported figure.

Global mergers and acquisitions in the third quarter of 2024 showed improvement after subdued 2023 and 2022.

Both deal value and volume were decent during the quarter, driven by solid financial performance, higher chances of a soft landing of the U.S. economy, buoyant markets and interest rate cuts. Also, the performance of the capital markets business, including issuance activities, improved. As a result, the company’s capital markets and advisory fees are expected to have increased.

The Zacks Consensus Estimate for capital markets and advisory fees is pegged at $76.14 million, indicating 4.3% growth sequentially.

The strong performance of the equity market is likely to have supported wealth and asset management revenues during the quarter under review.The Zacks Consensus Estimate for wealth and asset management revenues is pegged at $92 million, indicating a 2.3% rise from the previous quarter’s reported figure.

The consensus estimate for customer deposit and loan fees for the third quarter is pegged at $84.6 million, indicating a rise of 1.9% on a sequential basis. The consensus mark for insurance income of $18.3 million implies a sequential rise of 1.7%.

The consensus mark for total non-interest income is pegged at $507.4 million, indicating a 3.3% sequential rise.

Expenses: Huntington Bancshares’ higher outside data processing and other services expenses, deposit and marketing expenses are anticipated to have raised its costs in the third quarter. Also, the bank’s efforts to expand its commercial banking capabilities in high growth markets by adding more branches and hiring professionals are expected to have contributed to higher costs.

Though strategic efficiency initiatives are likely to reduce expenses to some extent, long-term investments in key growth initiatives are expected to have kept its expense base higher.

Asset Quality: HBAN is likely to have set aside a substantial amount of money for potential delinquent loans, given the expectations of an economic slowdown.

The Zacks Consensus Estimate for total non-performing assets of $780.08 million indicates a marginal increase from the figure reported in the prior quarter.

What Our Model Unveils for HBAN?

Per our proven model, the chances of Huntington Bancshares beating estimates this time are low.  The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you can see below.

Earnings ESP: Huntington Bancshares has an Earnings ESP of -2.78%.

Zacks Rank: HBAN currently carries a Zacks Rank of 3.

Stocks to Consider

Here are some finance stocks that you may want to consider, as our model shows that these hold the right combination of elements to post an earnings beat this time around.

First Horizon Corporation FHN has an Earnings ESP of +3.18% and carries a Zacks Rank #3 at present. The company is scheduled to release its third-quarter 2024 earnings on Oct. 16.

FHN’s quarterly earnings estimates have been unchanged over the past seven days.

The Earnings ESP for M&T Bank Corporation MTB is +0.33% and it also carries a Zacks Rank #3 at present. The company is slated to report its third-quarter 2024 results on Oct. 17.

The Zacks Consensus Estimate for MTB’s quarterly earnings has remained unchanged in the past seven days.

To read this article on Zacks.com click here.

(Bloomberg) — Stocks hit fresh all-time highs as investors looked ahead to Corporate America for further vindication of soft-landing bets.

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Without much in the way of economic data this week, earnings reports are poised to drive Wall Street sentiment. The S&P 500 rose almost 1%, notching another record — its 46th this year. That’s a hint investors are not deterred by the reduced forecasts for third-quarter results, and are instead betting this reporting season will once again deliver positive surprises.

Strategists are predicting S&P 500 firms will post their weakest results in the past four quarters, with just a 4.3% increase compared with a year ago, Bloomberg Intelligence data show. Meantime, corporate guidance implies a jump of about 16%. That solid outlook suggests companies could easily beat market expectations.

“Wall Street has underestimated Corporate America lately,” said Callie Cox at Ritholtz Wealth Management. “This environment is tough to get a read on, and I don’t blame anybody who’s approaching this rally with a bit of skepticism. We still think the biggest – and most expensive – risk here is to miss a rebound and an eventual rally higher.”

The S&P 500 hovered near 5,860 amid thin trading volume. The Nasdaq 100 added 0.8%. The Dow Jones Industrial Average climbed 0.5%. Nvidia Corp. led gains in megacaps, Apple Inc. gained on a bullish analyst call and Tesla Inc. rebounded after last week’s plunge. Goldman Sachs Group Inc. and Citigroup Inc. advanced ahead of results.

Treasury futures were marginally lower while cash trading was closed for a US holiday. The dollar edged up. Bitcoin jumped 5%. Oil declined after China’s highly anticipated Finance Ministry briefing on Saturday lacked specific new incentives to boost consumption in the world’s biggest crude importer.

Earnings season unofficially kicked off on Friday, led by financial bellwethers JPMorgan Chase & Co. and Wells Fargo & Co. On top of other big banks reporting this week, traders will be paying close attention to results from key companies like Netflix Inc. and JB Hunt Transport Services Inc.

An initial round of third-quarter financial results last week showed Corporate America is benefitting from lower rates early into the Federal Reserve’s easing cycle, according to Bank of America Corp. strategists.

Story continues

Easing rates pressure was seen in a surge in debt underwriting, mortgage applications and refinancing activity, as well as signs of a bottom in manufacturing, the BofA team including Ohsung Kwon and Savita Subramanian said.

To Solita Marcelli at UBS Global Wealth Management, third-quarter results should confirm that large-cap corporate profit growth is solid against a resilient macro backdrop.

“We maintain our positive outlook for US equities, supported by healthy economic and profit growth, the Fed’s easing cycle, and AI’s growth story,” she said. “While valuations are high, we think they are reasonable against the favorable backdrop.”

Marcelli reiterated her S&P 500 price target of 6,200 by June 2025, and continues to like “AI beneficiaries and quality stocks.”

An improving trend in US macro data should continue to offer support for stocks tied to economic momentum, according to Morgan Stanley strategist Mike Wilson.

“Further stabilization in the economic surprise index should support quality cyclicals even if it comes amid higher yields,” Wilson and his team wrote in a note.

Better US data and supportive policy have helped lower downside risks near-term, according to Goldman Sachs Group Inc. strategists led by Christian Mueller-Glissmann. They shifted to overweight equities and underweight credit for the next three months.

The strategists noted equities can deliver attractive returns driven by earnings growth and valuation expansion in late-cycle backdrops, while credit total returns are usually constrained by tight credit spreads and rising yields.

While they think the risk of a bear market remains relatively low, the analysts see potential for volatility due to geopolitical shocks, US elections, and less favorable growth/inflation mix.

“Last week, the S&P 500 index surpassed our year-end price objective of 5,800,” said Craig Johnson at Piper Sandler. “We are leaving it unchanged for now but realize some ‘fine-tuning’ is needed as we expect equities to continue trending higher after the US presidential election.”

Despite the above-average gain in the first two years of this bull market, history says that investors need to be prepared for a possible setback in the coming 12 months, according to Sam Stovall at CFRA.

The average return following the 11 bull markets that celebrated their second anniversary was 2% (5.2% excluding those that became bear markets before the third year was out, Stovall noted. What’s more, all experienced a decline of 5%, while five endured selloffs in excess of 10% but less than 20%, and three succumbed to new bear markets. Despite this unsettling intra-year volatility, three bulls posted double-digit gains.

While bull markets that have made it this long have tended to go on a lot longer before they finally experience a 20% drop, that doesn’t mean there haven’t been hiccups along the way, according to Bespoke Investment Group.

Overall, the S&P has seen weaker-than-average returns in year three of bull markets, the firm said. The index has averaged a gain of just 3.7% in the 12 months following day 503 of past bull markets — with positive returns just 55% of the time. That compares to an average gain of 9.26% across all rolling 12-month periods for the market.

“What we’d note, however, is that of the 11 bull markets shown, only two of them came to an end at some point during the 12-month window following day 503, so this period between years two and three of long-lasting bulls has been more of a consolidation phase rather than an endpoint,” Bespoke concluded.

Corporate Highlights:

• B. Riley Financial Inc., the money-losing broker-dealer and investment firm looking to cut debt, agreed to sell a majority stake in its Great American Holdings business to funds managed by Oaktree Capital Management LP.

• Adobe Inc. unveiled artificial intelligence tools that can create and modify videos, joining Big Tech companies and startups in trying to capitalize on demand for the emerging technology.

• Caterpillar Inc. was downgraded to underweight by Morgan Stanley, which flagged a disconnect between fundamentals and share price.

• Amgen Inc. was downgraded to hold at Truist Securities, which said upcoming obesity data is already priced into the stock.

• SoFi Technologies Inc. reached a deal to use $2 billion of Fortress Investment Group LLC funds for the origination of personal loans.

• Elliott Investment Management has called for a special shareholder meeting at Southwest Airlines Co., officially kicking off the firm’s first US proxy fight since 2017.

Key events this week:

• Eurozone industrial production, Tuesday

• US Empire Manufacturing index, Tuesday

• Goldman Sachs, Bank of America, Citigroup earnings, Tuesday

• Donald Trump will be interviewed by Bloomberg editor-in-chief John Micklethwait at the Economic Club of Chicago, Tuesday

• Fed’s Mary Daly, Adriana Kugler speak, Tuesday

• Morgan Stanley earnings, Wednesday

• ECB rate decision, Thursday

• US retail sales, jobless claims, industrial production, Thursday

• Fed’s Austan Goolsbee speaks, Thursday

• China GDP, Friday

• US housing starts, Friday

• Fed’s Christopher Waller, Neel Kashkari speak, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.8% as of 4 p.m. New York time

• The Nasdaq 100 rose 0.8%

• The Dow Jones Industrial Average rose 0.5%

• The MSCI World Index rose 0.6%

Currencies

• The Bloomberg Dollar Spot Index rose 0.3%

• The euro fell 0.3% to $1.0904

• The British pound was little changed at $1.3055

• The Japanese yen fell 0.4% to 149.78 per dollar

Cryptocurrencies

• Bitcoin rose 5% to $65,865.01

• Ether rose 6.5% to $2,619.04

Bonds

Commodities

• West Texas Intermediate crude fell 2.1% to $73.97 a barrel

• Spot gold fell 0.1% to $2,652.65 an ounce

This story was produced with the assistance of Bloomberg Automation.

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©2024 Bloomberg L.P.

Market News and Data brought to you by Benzinga APIs

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Market News and Data brought to you by Benzinga APIs

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

A recent analysis of 14 multi-state cannabis operators (MSOs) looks at how the potential removal of 280E in 2025 could impact their cash flows.

Section 280E of the U.S. tax code, which prevents cannabis companies from deducting normal business expenses due to federal prohibition, has long been a burden on the industry. If this tax provision were eliminated, cannabis companies would enjoy far better financial health.

Breakdown Of The Analysis

The chart provided by Viridian Capital Advisors shows the projected 2025 sources and uses of cash among the industry’s top MSOs, with an emphasis on how eliminating 280E could alter their financial standing.

• EBITDAR (Earnings Before Interest, Taxes, Depreciation and Rent): This is a critical metric because it represents the companies’ operational cash flow, excluding fixed charges.
• Additional Cash: Some companies are sitting on significant cash reserves, which serve as a buffer for covering operational needs. This is represented by the black line that shows EBITDAR plus existing cash.
• Impact of 280E: The red bars on the chart represent the additional tax expenses cannabis companies are incurring due to 280E. The black bars below reflect the estimated tax liability if 280E were removed. The significant gap between these bars shows how much relief companies could experience.

Read Also: EXCLUSIVE: Tracking Every Cannabis Deal Is ‘A Lot Of Fun,’ Says Financial Expert Behind Essential Investor Tool

Financial Outlook For Major MSOs

According to the analysis, six companies, including Green Thumb GTBIF, Trulieve TCNNF, Verano VRNOF, Cresco CRLBF, Glass House GLASF, and MariMed MRMD, are projected to have enough cash flow to cover all fixed charges in 2025, even without the removal of 280E. Notably, every other company except Schwazze SHWZ would have positive cash flow if 280E were eliminated.

However, while 2025 looks relatively benign for MSO credit, 2026 could present challenges, with significant debt maturities that many companies will need to refinance, Viridian Capital analysts warn.

Additionally, companies like Curaleaf and Trulieve have substantial back taxes recorded as “uncertain tax liabilities,” which could become a financial strain depending on how repayment plans are structured.

• Get Benzinga’s exclusive analysis and the top news about the cannabis industry and markets daily in your inbox for free. Subscribe to our newsletter here. You can’t afford to miss out if you’re serious about the business.

What This Means For The Cannabis Industry

If 280E is eliminated in 2025, the financial outlook for most cannabis companies would significantly improve. Companies would have more flexibility with cash flow and this relief could lead to higher profitability and more strategic investments. The potential tax reform could mark a turning point for an industry that has struggled under the burden of high taxes and federal prohibition.

Cover: image generated with IA tools.

Market News and Data brought to you by Benzinga APIs

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Iridium Communications IRDM is slated to release third-quarter 2024 earnings on Oct. 17, before market open.

The Zacks Consensus estimate for revenues is pegged at $205.7 million, indicating an increase of 4.1% from the year-ago level. The consensus estimate for earnings per share is pegged at 20 cents, unchanged in the past 60 days. In the year-ago quarter, the company reported a loss of 1 cent.

IRDM’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missed once and matched the same in the remaining quarter with the average surprise being 202.2%. In the past year, shares have lost 31.2% against sub-industry’s gain of 1.3%.

Image Source: Zacks Investment Research

Factors to Focus on Ahead of IRDM’s Q3 Earnings

Iridium’s third-quarter performance is likely to have gained momentum in the Service segment’s revenues and increasing subscriber base. Our estimate for segmental revenues is pegged at $155.5 million, implying a jump of 2.3% from a year-ago reported figure.

Strengthening commercial service revenues is a key catalyst. Commercial service revenues are likely to have been aided by strength in voice and data, IoT data, broadband, hosted payload and other data service business lines. We estimate commercial service revenues to be $129 million, indicating a 2.8% climb from the prior-year actual.

Revenues from voice and data are gaining from higher demand for Iridium’s push-to-talk services. Commercial IoT revenues are likely to have benefited from steady demand for personal satellite communications and traditional industrial services.

Hosted payload and other data service segment is also expected to have benefited from the new Iridium Satellite Time and Location offering.

Key Recent Developments

On Sept. 25, 2024, Iridium announced that the 3rd Generation Partnership Project (3GPP) approved its offer to broaden the capability of Narrowband Internet of Things (NB-IoT) for Non-Terrestrial Networks into the official Work Plan for 3GPP Release 19 (set to conclude in the fourth quarter of 2025). This initiative expands the company’s reach in global connectivity through its latest service, Iridium NTN Direct, which is expected to be the world’s first global 5G NB-IoT service.

On Sept. 19, 2024, Iridium announced its fourth stock repurchase authorization in four years. The $500 million authorization, approved by its board of directors, is the largest in the company’s history. It extends the total buyback authorization to $1.5 billion through Dec. 31, 2027.

On Sept. 3, 2024, the company introduced Iridium Certus GMDSS, making significant strides in maritime safety, compliance and communication. These terminals form a significant part of any ship’s hybrid network system with improved cost structure, efficiency and performance in maritime safety and security.

What Does Our Model Say for IRDM in Q3?

Our proven model does not conclusively predict an earnings beat for Iridium this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, this is not the case here.

Earnings ESP: Iridium has an Earnings ESP of 0.00%.

Zacks Rank: Iridium currently carries a Zacks Rank #2.

Stocks to Consider

Here are some stocks you may consider, as our model shows that these have the right combination of elements to beat on earnings this season.

Equifax EFX currently has an Earnings ESP of +1.56% and a Zacks Rank #2.

It is scheduled to release results for the third quarter of 2024 on Oct. 16. The Zacks Consensus Estimate for Equifax’s to-be-reported quarter’s earnings and revenues is pegged at $1.84 per share and $1.44 billion, respectively. Shares of EFX have gained 58.5% in the past year.

Netflix NFLX has an Earnings ESP of +1.37% and a Zacks Rank #2 at present. It is scheduled to release third-quarter 2024 results on Oct. 17. The Zacks Consensus Estimate for Netflix’s to-be-reported quarter’s earnings and revenues is pegged at $5.07 per share and $9.77 billion, respectively. Shares of NFLX have gained 100.3% in the past year.

Abbott Laboratories has an Earnings ESP of +0.18% and a Zacks Rank #2 at present. It is scheduled to release third-quarter 2024 results on Oct. 16. The Zacks Consensus Estimate for Abbott’s to-be-reported quarter’s earnings and revenues is pegged at $1.20 per share and $10.56 billion, respectively. Shares of ABT have gained 25.9% in the past year.

To read this article on Zacks.com click here.