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Wells Fargo (WFC) Stock Drops Despite Market Gains: Important Facts to Note

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The latest trading session saw Wells Fargo (WFC - Free Report) ending at $57.13, denoting a -0.38% adjustment from its last day's close. This move lagged the S&P 500's daily gain of 0.11%. Meanwhile, the Dow experienced a drop of 0.11%, and the technology-dominated Nasdaq saw an increase of 0.23%.

The biggest U.S. mortgage lender's stock has climbed by 1.33% in the past month, falling short of the Finance sector's gain of 2.37% and the S&P 500's gain of 1.5%.

Analysts and investors alike will be keeping a close eye on the performance of Wells Fargo in its upcoming earnings disclosure. The company's earnings report is set to go public on April 12, 2024. The company is forecasted to report an EPS of $1.10, showcasing a 10.57% downward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $20.17 billion, reflecting a 2.71% fall from the equivalent quarter last year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $4.72 per share and a revenue of $80.25 billion, signifying shifts of -13.08% and -2.84%, respectively, from the last 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. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending 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, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.13% lower within the past month. Wells Fargo is currently a Zacks Rank #3 (Hold).

From a valuation perspective, Wells Fargo is currently exchanging hands at a Forward P/E ratio of 12.16. This signifies a premium in comparison to the average Forward P/E of 11.19 for its industry.

It is also worth noting that WFC currently has a PEG ratio of 1.19. 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 industry had an average PEG ratio of 1.66 as trading concluded yesterday.

The Banks - Major Regional industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 96, which puts it in the top 39% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained 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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