Back to top

Image: Bigstock

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

Read MoreHide Full Article

In the latest market close, Wells Fargo (WFC - Free Report) reached $60.70, with a -0.62% movement compared to the previous day. The stock trailed the S&P 500, which registered a daily gain of 0.09%. Meanwhile, the Dow experienced a drop of 0.49%, and the technology-dominated Nasdaq saw an increase of 0.65%.

Heading into today, shares of the biggest U.S. mortgage lender had gained 1.21% over the past month, lagging the Finance sector's gain of 7.41% and the S&P 500's gain of 5.78% in that time.

The investment community will be closely monitoring the performance of Wells Fargo in its forthcoming earnings report. In that report, analysts expect Wells Fargo to post earnings of $1.25 per share. This would mark no growth from the year-ago period. Alongside, our most recent consensus estimate is anticipating revenue of $20.23 billion, indicating a 1.49% downward movement from the same quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $5.01 per share and revenue of $81.53 billion, indicating changes of -7.73% and -1.29%, respectively, compared to the previous year.

Investors should also take note of any recent adjustments to analyst estimates for Wells Fargo. Such recent modifications usually signify the changing landscape of near-term business trends. 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 benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.32% higher. Wells Fargo is holding a Zacks Rank of #2 (Buy) right now.

In terms of valuation, Wells Fargo is presently being traded at a Forward P/E ratio of 12.2. This represents a premium compared to its industry's average Forward P/E of 11.92.

It's also important to note that WFC currently trades at a PEG ratio of 1.2. 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 industry had an average PEG ratio of 1.39 as trading concluded yesterday.

The Banks - Major Regional industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 46, which puts it in the top 19% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

Wells Fargo & Company (WFC) - free report >>

Published in