What factors could drive CASH's EPS surprise in Q2 2025?

**Pathward Financial (CASH) is poised to experience a positive EPS surprise in Q2 2025** due to several key factors: 1. **Economic Conditions Favor Banks**: The broader economic environment is expected to support the banking sector, which is a positive indicator for CASH. The Federal Reserve's decision to hold rates steady with projections of fewer rate cuts and higher inflation outlook creates a stable interest rate environment that benefits banks' net interest margins. 2. **Stable Interest Rates Benefit Banks**: The stability in interest rates reduces the likelihood of significant credit losses, which is particularly important for banks like CASH. This stability allows banks to better manage their loan portfolios and maintain healthy asset quality, which can lead to improved earnings. 3. **Inflation Outlook**: The inflation outlook with an expected uptick in core PCE inflation from 2.6% to 2.8% in 2024 and from 2.2% to 2.3% in 2025 suggests that inflationary pressures may begin to rise, potentially leading to higher interest income for banks. This can contribute to better earnings performance. 4. **Growth Outlook**: The growth outlook for real GDP has been maintained, with expectations of 2.0% growth in 2025. A stable economic growth rate can lead to increased lending activities and higher demand for banking services, which can benefit CASH's financial performance. 5. **Market Sentiment and Performance**: CASH's stock performance shows a last change of -3.1%, which is relatively stable. Positive market sentiment towards the banking sector can translate into better earnings as banks often benefit from improved economic conditions and investor confidence. In conclusion, Pathward Financial (CASH) is likely to experience a positive EPS surprise in Q2 2025 due to favorable economic conditions for the banking sector, stable interest rates, an inflation outlook that suggests potential increases in interest income, and a stable economic growth rate that supports lending activities. These factors collectively contribute to a positive earnings environment for CASH.