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Wells Fargo (WFC) Dips More Than Broader Markets: What You Should Know

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Wells Fargo (WFC - Free Report) closed at $39.71 in the latest trading session, marking a -1.17% move from the prior day. This change lagged the S&P 500's daily loss of 0.07%. Elsewhere, the Dow gained 0.27%, while the tech-heavy Nasdaq added 0.02%.

Heading into today, shares of the biggest U.S. mortgage lender had lost 12.21% over the past month, lagging the Finance sector's loss of 8.94% and the S&P 500's loss of 7.99% in that time.

Wells Fargo will be looking to display strength as it nears its next earnings release, which is expected to be July 15, 2022. In that report, analysts expect Wells Fargo to post earnings of $0.88 per share. This would mark a year-over-year decline of 36.23%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.79 billion, down 12.26% from the year-ago period.

WFC's full-year Zacks Consensus Estimates are calling for earnings of $4.04 per share and revenue of $73.2 billion. These results would represent year-over-year changes of -18.38% and -6.18%, respectively.

It is also important to note the recent changes to analyst estimates for Wells Fargo. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 2.39% lower within the past month. Wells Fargo is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note Wells Fargo's current valuation metrics, including its Forward P/E ratio of 9.94. For comparison, its industry has an average Forward P/E of 9.79, which means Wells Fargo is trading at a premium to the group.

We can also see that WFC currently has a PEG ratio of 0.97. 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. WFC's industry had an average PEG ratio of 1.38 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 104, which puts it in the top 42% 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.

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


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