Earnings Estimates Rising for Regions Financial (RF): Will It Gain?

Zacks Equity Research
·2-min read

Regions Financial (RF) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.

The upward trend in estimate revisions for this holding company for Regions Bank reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For Regions Financial, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The company is expected to earn $0.38 per share for the current quarter, which represents a year-over-year change of -5%.

Over the last 30 days, eight estimates have moved higher for Regions Financial while one has gone lower. As a result, the Zacks Consensus Estimate has increased 24.37%.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $0.78 per share, representing a year-over-year change of -49.68%.

The revisions trend for the current year also appears quite promising for Regions Financial, with 11 estimates moving higher over the past month compared to one negative revision. The consensus estimate has also received a boost over this time frame, increasing 45.74%.

Favorable Zacks Rank

Thanks to promising estimate revisions, Regions Financial currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Investors have been betting on Regions Financial because of its solid estimate revisions, as evident from the stock's 10.4% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.


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