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Wells Fargo (WFC) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3 min read

Wells Fargo (WFC) closed at $25.06 in the latest trading session, marking a +0.08% move from the prior day. This change outpaced the S&P 500's 1.16% loss on the day. Elsewhere, the Dow lost 1.16%, while the tech-heavy Nasdaq lost 0.82%.

Prior to today's trading, shares of the biggest U.S. mortgage lender had gained 9.78% over the past month. This has outpaced the Finance sector's gain of 9.47% and the S&P 500's gain of 3.87% in that time.

Wall Street will be looking for positivity from WFC as it approaches its next earnings report date. The company is expected to report EPS of $0.59, down 36.56% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.99 billion, down 9.43% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.40 per share and revenue of $72.24 billion. These totals would mark changes of -90.87% and -15.07%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for WFC. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. The Zacks Consensus EPS estimate has moved 5.32% higher within the past month. WFC is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, WFC currently has a Forward P/E ratio of 62.32. Its industry sports an average Forward P/E of 13.95, so we one might conclude that WFC is trading at a premium comparatively.

Investors should also note that WFC has a PEG ratio of 6.42 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. WFC's industry had an average PEG ratio of 1.94 as of yesterday's close.

The Banks - Major Regional industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 125, which puts it in the top 50% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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Zacks Investment Research