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

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Wells Fargo (WFC - Free Report) closed the most recent trading day at $39.92, moving +1.91% from the previous trading session. This change outpaced the S&P 500's 1.06% gain on the day. Meanwhile, the Dow gained 1.05%, and the Nasdaq, a tech-heavy index, added 0.4%.

Heading into today, shares of the biggest U.S. mortgage lender had lost 13.59% over the past month, lagging the Finance sector's loss of 9.62% and the S&P 500's loss of 8.3% in that time.

Wall Street will be looking for positivity from Wells Fargo as it approaches its next earnings report date. This is expected to be July 15, 2022. The company is expected to report EPS of $0.80, down 42.03% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.79 billion, down 12.26% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.04 per share and revenue of $73.2 billion. These totals would mark changes of -18.38% and -6.18%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Wells Fargo. 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.

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 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 2.36% lower. Wells Fargo is currently a Zacks Rank #3 (Hold).

In terms of valuation, Wells Fargo is currently trading at a Forward P/E ratio of 9.69. For comparison, its industry has an average Forward P/E of 9.65, which means Wells Fargo is trading at a premium to the group.

It is also worth noting that WFC currently has a PEG ratio of 0.95. 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. The Banks - Major Regional was holding an average PEG ratio of 1.33 at yesterday's closing price.

The Banks - Major Regional industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 149, which puts it in the bottom 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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