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Wells Fargo (WFC) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Wells Fargo (WFC) closed the most recent trading day at $48.93, moving +0.35% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.03%. Meanwhile, the Dow gained 0.13%, and the Nasdaq, a tech-heavy index, lost 0.11%.

Heading into today, shares of the biggest U.S. mortgage lender had gained 9.13% over the past month, outpacing the Finance sector's gain of 5.13% and the S&P 500's gain of 4.17% in that time.

WFC will be looking to display strength as it nears its next earnings release. In that report, analysts expect WFC to post earnings of $1.18 per share. This would mark year-over-year growth of 4.42%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $20.73 billion, down 5.53% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.78 per share and revenue of $83.39 billion. These totals would mark changes of +11.68% and -3.5%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for WFC. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.37% lower within the past month. WFC is currently a Zacks Rank #3 (Hold).

Looking at its valuation, WFC is holding a Forward P/E ratio of 10.21. This valuation marks a discount compared to its industry's average Forward P/E of 11.47.

Meanwhile, WFC's PEG ratio is currently 0.95. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. WFC's industry had an average PEG ratio of 1.43 as of yesterday's close.

The Banks - Major Regional industry is part of the Finance sector. This group has a Zacks Industry Rank of 181, putting it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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