The market expects the Blackstone Mortgage Trust (BXMT) to see an annualized decline in earnings driven by higher earnings when it reports results for the quarter ending June 2021. This well-known consensus forecast is important in assessing a company’s earnings picture, but a powerful factor that can affect its share price in the short term is comparing actual results to those estimates.
The income statement, which is expected to be released on July 28, 2021, could help the stock move higher if these key numbers are better than expected. On the other hand, if they miss, the stock could move lower.
While the sustainability of immediate price changes and future earnings expectations will largely depend on management’s discussion of business conditions in the income statement, it is worth reducing the likelihood of a positive per share surprise.
Sachs consensus assessment
The real estate finance company is expected to post quarterly earnings of $ 0.61 per share in its upcoming report, up -1.6% from last year.
Revenue is expected to be $ 115.01 million, up 7.4% year-on-year.
Assessment of the trend of change
The consensus EPS for the quarter has remained unchanged for the past 30 days. In essence, it is a reflection of how the leading analysts collectively revised their initial estimates for this period.
Investors should be aware that the direction in which each analyst revises their estimates may not always be reflected in the cumulative change.
Price, Consensus and Surprise for EPS
The revision of estimates prior to the publication of the company’s income statement provides a key to understanding the business environment for the period, the results of which will become known. Our patented Zacks Earnings ESP (Expected Surprise Prediction) model is based on this understanding.
Zacks Earnings ESP compares the most accurate estimate to the Zacks consensus estimate for the quarter; The most accurate estimate is the latest version of the Zacks Consensus earnings per share estimate. The idea here is that analysts revising their estimates just before the earnings report is released have the most recent information that could potentially be more accurate than what they and other consensus participants predicted earlier.
Thus, a positive or negative ESP of earnings theoretically indicates the likely deviation of actual earnings from the consensus estimate. However, the predictive power of the model is only important for positive ESP values.
A positive earnings ESP is a strong predictor of profit growth, especially when combined with a Zacks rank of # 1 (strong buy), 2 (buy), or 3 (hold). Our research shows that stocks with this combination cause a positive surprise almost 70% of the time, and a solid Zacks rating actually increases the predictive power of Earnings ESP.
Note that a negative ESP for earnings does not indicate a miss. Our research shows that it is difficult to predict earnings growth with any degree of certainty for stocks with negative ESP earnings and / or a Sachs rating of 4 (sell) or 5 (strong sell).
How have Blackstone mortgage numbers changed?
For Blackstone Mortgage, the most accurate estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become optimistic about the company’s earnings prospects. As a result, ESP gained 1.64%.
On the other hand, the stock currently has a Zacks # 3 rating.
Thus, this combination indicates that Blackstone Mortgage is likely to outperform consensus earnings per share estimates.
Is there a clue to the windfall story?
When calculating estimates of a company’s future earnings, analysts often consider the extent to which it may have matched past consensus estimates. So, it’s worth taking a look at the surprise history to gauge its impact on the upcoming date.
Blackstone Mortgage was expected to post earnings of $ 0.61 per share in the last quarterly quarter when it actually posted earnings of $ 0.59, or an unexpected -3.28% profit.
Over the past four quarters, the company has doubled the net earnings per share consensus forecast.
Excess or decline in profits cannot be the only reason a stock moves up or down. Many stocks end up losing ground despite declining earnings due to other factors that disappoint investors. Likewise, unforeseen catalysts are helping a number of stocks rally despite lost profits.
However, stock betting that is expected to exceed earnings expectations does increase the odds of success. This is why it is worth checking the ESP earnings and Zacks ranking before releasing the quarterly issue. Be sure to use our earnings ESP filter to identify the best stocks to buy or sell before they report.
Blackstone Mortgage looks like a compelling candidate for revenue growth. However, investors should be aware of other factors in order to bet or steer clear of these stocks pending release.
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