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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 $40.86, moving +0.52% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.02%. Meanwhile, the Dow lost 0.2%, and the Nasdaq, a tech-heavy index, added 0.22%.

Prior to today's trading, shares of the biggest U.S. mortgage lender had lost 3.21% over the past month. This has lagged the Finance sector's loss of 1.61% and the S&P 500's loss of 2.86% in that time.

Investors will be hoping for strength from Wells Fargo as it approaches its next earnings release, which is expected to be October 13, 2023. In that report, analysts expect Wells Fargo to post earnings of $1.23 per share. This would mark a year-over-year decline of 5.38%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $20.2 billion, up 3.58% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.84 per share and revenue of $81.28 billion, which would represent changes of +54.14% and +10.16%, respectively, from the prior year.

Any recent changes to analyst estimates for Wells Fargo should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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. Within the past 30 days, our consensus EPS projection has moved 0.54% lower. Wells Fargo is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Wells Fargo has a Forward P/E ratio of 8.4 right now. Its industry sports an average Forward P/E of 7.99, so we one might conclude that Wells Fargo is trading at a premium comparatively.

We can also see that WFC currently has a PEG ratio of 0.82. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Banks - Major Regional was holding an average PEG ratio of 1.35 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 167, which puts it in the bottom 34% 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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