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

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In the latest trading session, Wells Fargo (WFC - Free Report) closed at $23.84, marking a -0.54% move from the previous day. This change lagged the S&P 500's 2.02% gain on the day. Elsewhere, the Dow gained 1.6%, while the tech-heavy Nasdaq added 2.71%.

Prior to today's trading, shares of the biggest U.S. mortgage lender had lost 5.33% over the past month. This has lagged the Finance sector's loss of 0.85% and the S&P 500's loss of 0.39% in that time.

WFC will be looking to display strength as it nears its next earnings release. On that day, WFC is projected to report earnings of $0.36 per share, which would represent a year-over-year decline of 60.87%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.85 billion, down 18.92% from the year-ago period.

WFC's full-year Zacks Consensus Estimates are calling for earnings of $0.02 per share and revenue of $71.58 billion. These results would represent year-over-year changes of -99.54% and -15.86%, respectively.

Investors might also notice recent changes to analyst estimates for WFC. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 47.62% lower within the past month. WFC is currently a Zacks Rank #4 (Sell).

Looking at its valuation, WFC is holding a Forward P/E ratio of 1198.5. Its industry sports an average Forward P/E of 14.21, so we one might conclude that WFC is trading at a premium comparatively.

We can also see that WFC currently has a PEG ratio of 123.49. 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. The Banks - Major Regional industry currently had an average PEG ratio of 2.24 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 224, which puts it in the bottom 12% 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.

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