Visible Alpha Financials

In this analysis, we looked at asset quality trends for publicly traded banks around the world and Covid-19 pandemic’s impact on the industry, providing an overview of recent performance and a deep dive into future expectations. We found that non-performing loans (NPLs) are on the rise, and banks are building reserves to support the rising NPLs. In addition, we found that there is a wide variation by region in trends in bank asset quality due to government and central bank responses to Covid-19.

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Questionable Profits

Zillow analysts have widely different views on the company’s future profitability as they transform into a real estate iBuyer. The company is in the midst of an ambitious multi-year transition to “Zillow 2.0” that began in 2018 with Zillow Offers, a program allowing homeowners to sell directly to Zillow to be remodeled and resold. Many analysts are skeptical if the iBuyer model can achieve long-term profitability, and Zillow’s core business – Internet, Media & Technology (IMT) – is expected to offset on-going losses from the Home segment in the near-term. The company guided for breakeven consolidated adjusted EBITDA in 2020, but consensus estimates are projecting a small loss.

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In 2Q16, American Express and Costco ended their 16-year exclusive-card partnership. The loss was a significant blow to American Express, as Costco made up a significant portion of their billed business and their cards in force. The cut was expected to weigh on results for some time and potentially impact other cobranded partnerships as well.

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