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Wells Fargo (WFC) Gains But Lags Market: What You Should Know

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Wells Fargo (WFC - Free Report) closed at $24.88 in the latest trading session, marking a +0.28% move from the prior day. The stock lagged the S&P 500's daily gain of 0.52%. Elsewhere, the Dow gained 0.01%, while the tech-heavy Nasdaq added 1.21%.

Heading into today, shares of the biggest U.S. mortgage lender had gained 1.39% over the past month, outpacing the Finance sector's loss of 0.27% and the S&P 500's gain of 0.49% in that time.

Investors will be hoping for strength from WFC as it approaches 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.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.02 per share and revenue of $71.58 billion. These totals would mark changes of -99.54% and -15.86%, 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. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Within the past 30 days, our consensus EPS projection has moved 47.62% lower. WFC is holding a Zacks Rank of #4 (Sell) right now.

Digging into valuation, WFC currently has a Forward P/E ratio of 1240.5. This represents a premium compared to its industry's average Forward P/E of 14.54.

We can also see that WFC currently has a PEG ratio of 127.82. 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 2.26 as of yesterday's close.

The Banks - Major Regional industry is part of the Finance sector. This group has a Zacks Industry Rank of 227, putting it in the bottom 11% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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