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What's in Store for Barings BDC (BBDC) This Earnings Season?

Barings BDC, Inc. BBDC is slated to announce third-quarter 2020 results on Nov 11, after market close. Its earnings for the to-be-reported quarter are expected to have declined year over year.

In the last reported quarter, the company’s earnings lagged the Zacks Consensus Estimate. Results were affected a fall in investment income, partly offset by lower expenses.

Barings BDC has an unimpressive earnings surprise history. Its earnings lagged the Zacks Consensus Estimate in three of the trailing four quarters, the negative surprise being 4.79%, on average.

 

BARINGS BDC, INC. Price and EPS Surprise

BARINGS BDC, INC. Price and EPS Surprise

BARINGS BDC, INC. price-eps-surprise | BARINGS BDC, INC. Quote

 

Before we take a look at what our quantitative model predicts for the third quarter, let’s check the factors that are likely to have influenced its performance.

Factors at Play

Given the low interest rates environment during the third quarter, interest income from investment, and other income are likely to have been negatively impacted. Also, slowdown in the middle market lending due to the pandemic is expected to have kept net investment income under pressure during the third quarter.

On the cost front, Barings BDC has been witnessing lower expenses over the past several quarters. Moreover, as the company continues to make efforts at costs savings, operating expenses are likely to have been low in the to-be-reported quarter.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Barings BDC this season. This is because it doesn’t have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or better — to increase the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Barings BDC has an Earnings ESP of -1.64%.

Zacks Rank: The company currently carries a Zacks Rank #3.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Notably, activities of the company in the third quarter were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for earnings of 15 cents remained unchanged over the past seven days. It indicates a fall of 6.3% from the year-ago reported number.

However, the Zacks Consensus Estimate for sales is pegged at $16.9 million, which reflects 12.6% growth.

Earnings Dates of Other Finance Stocks

Among other finance stocks, Golub Capital BDC, Inc. GBDC and Gladstone Capital Corporation GLAD are scheduled to release results on Nov 23 and Nov 11, respectively.  Oaktree Strategic Income Corp. OCSI will report on Nov 19.

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Golub Capital BDC, Inc. (GBDC): Free Stock Analysis Report
 
Gladstone Capital Corporation (GLAD): Free Stock Analysis Report
 
Oaktree Strategic Income Corp. (OCSI): Free Stock Analysis Report
 
BARINGS BDC, INC. (BBDC): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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