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Wells Fargo (WFC) Advances While Market Declines: Some Information for Investors

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In the latest trading session, Wells Fargo (WFC - Free Report) closed at $55.81, marking a +1.36% move from the previous day. The stock's performance was ahead of the S&P 500's daily loss of 0.12%. Meanwhile, the Dow experienced a drop of 0.25%, and the technology-dominated Nasdaq saw a decrease of 0.41%.

Shares of the biggest U.S. mortgage lender witnessed a gain of 12% over the previous month, beating the performance of the Finance sector with its gain of 3.94% and the S&P 500's gain of 4.83%.

Analysts and investors alike will be keeping a close eye on the performance of Wells Fargo in its upcoming earnings disclosure. On that day, Wells Fargo is projected to report earnings of $1.10 per share, which would represent a year-over-year decline of 10.57%. Meanwhile, our latest consensus estimate is calling for revenue of $20.18 billion, down 2.67% from the prior-year quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $4.72 per share and revenue of $80.25 billion, indicating changes of -13.08% and -2.84%, respectively, compared to the previous year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Wells Fargo. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.11% higher. Wells Fargo currently has a Zacks Rank of #3 (Hold).

With respect to valuation, Wells Fargo is currently being traded at a Forward P/E ratio of 11.66. This expresses a premium compared to the average Forward P/E of 10.6 of its industry.

One should further note that WFC currently holds a PEG ratio of 1.14. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Banks - Major Regional industry was having an average PEG ratio of 1.51.

The Banks - Major Regional industry is part of the Finance sector. With its current Zacks Industry Rank of 41, this industry ranks in the top 17% of all industries, numbering over 250.

The Zacks Industry Rank is ordered 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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