Regions Financial Q3 Earnings: Buying Soaring NYSE:RF Stock Before Call?

in EARNINGS/INVESTING IDEAS by

Regions Financial Corporation (NYSE:RF) is scheduled to report Q3 earnings results on October 20, 2020.

The company is expected to report earnings of $0.33/share on revenue of $1.498 billion. The consensus earnings per share (EPS) of $0.33/share is based on a poll of 19 analysts and represents a decline in eps of −16.7% over the same quarter last year, when the company reported earnings of $0.39/share.

The revenue forecast of $1.498 billion based on a poll of 9 analysts implies a year-over-year (YoY) decline in revenue of −0.6%. Last year the company reported $1.508 billion in revenue for the quarter.

Expected to report EPS contraction of −16.7% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $1,498.49 $1,508.00 −0.6%
EPS $0.33 $0.39 −16.7%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, missed 2 quarters, and met expectations 2 quarters.

What are your expectations from Regions Financial Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.07 -$0.23 −434.4% Missed
Q1, 2020 $0.31 $0.15 −50.9% Missed
Q4, 2019 $0.39 $0.40 3.0% Beat
Q3, 2019 $0.39 $0.39 0.4% Beat
Q2, 2019 $0.39 $0.39 −0.8% Missed
Q1, 2019 $0.37 $0.37 0.7% Beat
Q4, 2018 $0.38 $0.38 −0.2% Missed
Q3, 2018 $0.36 $0.37 2.7% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −4.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 17, 2020 $10.80 $10.32 −4.4% Decline
April 17, 2020 $8.85 $9.52 7.6% Increase
January 17, 2020 $16.65 $16.39 −1.6% Decline
October 22, 2019 $16.07 $16.28 1.3% Increase

Fundamentals And Technical Analysis

Regions Financial Corporation is currently trading at $12.58/share, up 0.9% for the day. The company is trading at approximately 71.5% of its 52-week high of $17.54/share. The company’s stock price is up 21.9% since the last earnings report and down −2.9% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 54.43 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:RF Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 18.37 and a forward P/E multiple of 22.95.

Regions Financial Corporation’s current share price also implies a price-to-book (P/B) multiple of 0.75. The following table summarizes some other key fundamental ratios:

Data as of October 19, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $12.58
P/E Ratio 18.4x
P/E Ratio (Fwd) 23.0x
PEG Ratio −0.3
Total Debt / Total Capital 33.3%
Levered Free Cash Flow $2.904 billion
EV / EBITDA 2.7x

Finbox

Regions Financial Corporation is a large-cap stock with a market capitalization of $11.973 billion. The company operates in the Financials sector and the Banks industry.

Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing; deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, branch small business and indirect loans, consumer credit cards, and other consumer loans, as well as deposits. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. The company also provides investment and insurance products; low income housing tax credit corporate fund syndication services; and other specialty financing services. As of March 18, 2020, it operated 1,400 banking offices and 2,000 automated teller machines across the South, Midwest and Texas. Regions Financial Corporation was founded in 1970 and is headquartered in Birmingham, Alabama.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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