Valley National (VLY) Earnings Expected to Grow: Should You Buy?

Valley National (VLY) is anticipated to report Q2 2025 earnings of $0.22 per share, a 69.2% year-over-year increase, on revenues projected at $493.23 million, up 8.6%. Despite these growth expectations, recent analyst sentiment indicates caution, with the consensus EPS estimate revised 0.65% lower and a negative Zacks Earnings ESP of -2.33%. Coupled with a Zacks Rank of #3 and a history of missing EPS estimates in the last four quarters, VLY is not considered a strong candidate for an earnings beat, suggesting potential downside risk if actual results fall short of revised expectations.

Analysis

Valley National Bancorp (VLY) is poised to report substantial year-over-year growth, with Wall Street consensus projecting a 69.2% increase in EPS to $0.22 and an 8.6% rise in revenue to $493.23 million for the quarter ending June 2025. However, this optimistic growth narrative is tempered by several cautionary indicators. Analyst sentiment has turned negative recently, evidenced by a 0.65% downward revision in the consensus EPS estimate over the last 30 days. Furthermore, the company's Zacks Earnings ESP is -2.33%, signifying that the most recent analyst estimates are below the consensus, a bearish signal heading into the earnings release. This concern is substantiated by VLY's historical performance, as the company has failed to beat consensus EPS estimates in the last four consecutive quarters, posting a -5.26% surprise in its most recent report. The combination of a neutral Zacks Rank #3 (Hold) and a negative ESP makes an earnings beat statistically unlikely, creating a high-risk scenario where lofty growth expectations could clash with a potential earnings miss.

Key Decisions for Investors

• Given the negative Earnings ESP and a four-quarter history of missing EPS estimates, investors should exercise caution and avoid initiating new long positions ahead of the July 24 report due to the elevated risk of a negative surprise.
• For those holding existing positions, the primary focus should be on management's forward-looking guidance during the earnings call, as this will be more critical for the stock's sustained performance than the initial reaction to the headline numbers.
• The combination of downward earnings revisions and a poor track record of meeting expectations suggests it may be prudent to consider trimming exposure or implementing hedging strategies to mitigate potential downside risk from a likely earnings miss.