Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

On Mar 6, 2013, we reiterated our long-term recommendation on Wells Fargo & Company (WFC - Analyst Report) at Neutral based on its diverse geographic and business mix. Moreover, the company’s strategic acquisitions and solid capital position are expected to improve profitability going forward. However, a protracted economic recovery and pressure on net interest margin remain concerns.

Why Neutral?

Wells Fargo has achieved its 12th consecutive quarter of growth in earnings per share by reporting earnings of 92 cents per share in fourth quarter 2012. Results improved from earnings per share of 88 cents in the prior quarter and 73 cents in the year-ago quarter. Also, it beat the Zacks Consensus Estimate by 5 cents.

Results at Wells Fargo benefited from improvement in top line, aided by rise in all segments’ revenue. It also reported $250 million in reserve release (pre-tax), attributable to improved portfolio performance.

However, the company experienced a rise in non-interest expenses. Non-interest expense was $12.9 billion, up 6.6% from the prior quarter. Further, regulatory issues as well as increasing demand for mortgage buybacks added to its woes.

On Jan 22, 2013, Wells Fargo enhanced its quarterly common stock dividend by 14% to 25 cents per share. The dividend was paid on Mar 1, 2013 to shareholders of record as of Feb 1, 2013. This marks Wells Fargo’s 3rd consecutive year of dividend increase, reflecting its commitment to return value to shareholders with strong cash generation capabilities.

Following fourth-quarter 2012 results, the Zacks Consensus Estimate for 2013 and 2014 has remained stable at $3.60 and $3.87 per share, respectively, over the last 60 days. With the Zacks Consensus Estimates remaining constant, the company retains a Zacks Rank #3 (Hold).

Other Major Banks to Consider

Among peers, BankUnited Inc. (BKU - Analyst Report) holds a Zacks Rank #1 (Strong Buy), while Fifth Third Bancorp (FITB - Analyst Report) and State Street Corporation (STT - Analyst Report) retain a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%