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Wells Fargo (WFC) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Wells Fargo (WFC) closed at $38.60, marking a -1% move from the previous day. This move lagged the S&P 500's daily loss of 0.13%. At the same time, the Dow lost 0.15%, and the tech-heavy Nasdaq gained 0.14%.

Coming into today, shares of the biggest U.S. mortgage lender had lost 9.93% in the past month. In that same time, the Finance sector lost 4.35%, while the S&P 500 lost 3.32%.

Wells Fargo will be looking to display strength as it nears its next earnings release. On that day, Wells Fargo is projected to report earnings of $0.90 per share, which would represent a year-over-year decline of 34.78%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.79 billion, down 12.26% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.07 per share and revenue of $73.2 billion. These totals would mark changes of -17.78% and -6.18%, respectively, from last year.

Any recent changes to analyst estimates for Wells Fargo should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 1.74% lower. Wells Fargo is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Wells Fargo has a Forward P/E ratio of 9.59 right now. For comparison, its industry has an average Forward P/E of 9.65, which means Wells Fargo is trading at a discount to the group.

Also, we should mention that WFC has a PEG ratio of 0.94. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Banks - Major Regional industry currently had an average PEG ratio of 1.4 as of yesterday's close.

The Banks - Major Regional industry is part of the Finance sector. This group has a Zacks Industry Rank of 101, putting it in the top 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow WFC in the coming trading sessions, be sure to utilize Zacks.com.


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