Wells Fargo (WFC) closed at $86.33 in the latest trading session, marking a +1.08% move from the prior day. The stock outperformed the S&P 500, which registered a daily gain of 0.25%. Meanwhile, the Dow experienced a rise of 0.39%, and the technology-dominated Nasdaq saw an increase of 0.59%.
Heading into today, shares of the biggest U.S. mortgage lender had lost 2.18% over the past month, lagging the Finance sector’s gain of 1.61% and the S&P 500’s loss of 0.23%.
The investment community will be closely monitoring the performance of Wells Fargo in its forthcoming earnings report. The company’s earnings per share (EPS) are projected to be $1.66, reflecting a 16.9% increase from the same quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $21.5 billion, indicating a 5.49% upward movement from the same quarter last year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $6.28 per share and a revenue of $84.01 billion, indicating changes of +16.95% and +2.09%, respectively, from the former year.
It is also important to note the recent changes to analyst estimates for Wells Fargo. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts’ favorable outlook on the business health and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. 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.
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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Currently, Wells Fargo is carrying a Zacks Rank of #2 (Buy).
In terms of valuation, Wells Fargo is currently trading at a Forward P/E ratio of 13.6. This denotes a discount relative to the industry average Forward P/E of 16.59.
It is also worth noting that WFC currently has a PEG ratio of 0.87. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company’s expected earnings growth trajectory. The Financial – Investment Bank industry had an average PEG ratio of 1.08 as trading concluded yesterday.
The Financial – Investment Bank industry is part of the Finance sector. This industry, currently bearing a Zacks Industry Rank of 26, finds itself in the top 11% echelons of all 250+ industries.
Source: finance.yahoo.com
