Why First Interstate BancSystem (FIBK) Could Outperform Earnings Estimates Again

If you're searching for a stock with a proven track record of exceeding earnings expectations, then First Interstate BancSystem (FIBK) may be worth a closer look. This company, which operates as the holding entity for First Interstate Bank, is part of the Zacks Banks - Midwest sector and shows promising signs for its upcoming quarterly earnings report.

Impressive Earnings History

First Interstate BancSystem has established a solid history of outperforming earnings estimates. Over its last two earnings reports, the company has consistently surpassed these forecasts, averaging a remarkable 6.50% above expectations in this time frame.

In the latest quarter, First Interstate BancSystem reported earnings of $0.58 per share, which notably exceeded the Zacks Consensus Estimate of $0.55 per share, resulting in a positive surprise of 5.45%. In the quarter prior, there was an expectation of $0.53 per share, but the company delivered earnings of $0.57, translating to an impressive surprise of 7.55%.

Positive Earnings Forecasts

This history of exceeding expectations has led to a favorable adjustment in earnings estimates for First Interstate BancSystem. Currently, the Zacks Earnings ESP (Expected Surprise Prediction) stands at a positive level, suggesting a strong likelihood for an earnings beat in the near future. This positive sentiment is further supported by the company's solid Zacks Rank.

Research indicates that stocks with a positive Earnings ESP combined with a Zacks Rank of #3 (Hold) or higher have a nearly 70% chance of delivering a positive surprise. This means that out of every 10 stocks with this combination, up to seven might exceed their earnings estimates.

Understanding Earnings ESP

The Zacks Earnings ESP is a tool that compares the Most Accurate Estimate to the Zacks Consensus Estimate for the upcoming earnings report. The Most Accurate Estimate is considered to provide a more current perspective, reflecting analyst adjustments made just before the earnings announcement. This often makes it more reliable than earlier consensus predictions.

Currently, First Interstate BancSystem boasts an Earnings ESP of +1.67%, indicating that analysts are increasingly optimistic about its short-term earnings potential. Coupling this positive ESP with a strong Zacks Rank of #2 (Buy) points toward the possibility of another earnings surprise. The company is expected to release its upcoming earnings report on October 24, 2024.

Importance of Earnings ESP

It's essential to understand that while a negative Earnings ESP may lessen its predictive strength, it does not necessarily guarantee an earnings miss. Many companies successfully exceed the consensus EPS estimate, even if their shares experience varied reactions post-announcement. Some stocks may remain steady even after underperforming expectations.

This underscores the importance of monitoring a company's Earnings ESP before its quarterly release, as it enhances the likelihood of making successful investment decisions. Using the Earnings ESP Filter can help identify the top stocks to consider buying or selling ahead of their earnings release.

Earnings, Stocks, Investing