We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
An Early Preview of Wells Fargo's (WFC) Q1 Earnings Outlook
Read MoreHide Full Article
Shares of Wells Fargo (WFC - Free Report) surged near the end of last year, and this momentum carried over into the early part of 2018. Then in early February, Wells Fargo saw its stock price tumble along with many other companies. Now, amid this newly volatile market, investors might be even more focused on Wells Fargo’s upcoming Q1 financial results.
Wells Fargo’s very public and serious business-related scandals, including its massive fake account fiasco, caused some damage to its reputation and its stock price over the last year. These self-inflicted wounds might still taint how outsiders and investors perceive the company. But the real question is: does the perception of Wells Fargo correspond with its current first quarter earnings outlook?
With that said, let’s take a look at what to expect from Wells Fargo’s upcoming Q1 financial results to see if the embattled banking power seems poised to turn things around.
Latest Outlook and Valuation
Wells Fargo’s first quarter revenues are expected to dip by 1.5% to hit $21.67 billion, based on our current Zacks Consensus Estimates. Meanwhile, the bank is projected to see its earnings climb by 6% to reach $1.06 per share.
However, Wells Fargo’s earnings estimate revision activity has been mixed recently. The company has earned two upward earnings estimate revisions and six downward revisions, all within the last 60 days. These revisions lowered Wells Fargo’s consensus earnings estimate by 2 cents.
WFC is currently trading with a Forward P/E of 10.6. This marks a discount compared to the “Banks - Major Regional” industry, which is currently trading at an average of 11.6x forward earnings.
This also marks a discount compared to where Wells Fargo was trading at just a few months ago. Wells Fargo’s newly discounted valuation can be attributed, for the most part, to its recently declining stock price—which far outpaces its industry’s dip.
Most Recent Results
Wells Fargo posted adjusted earnings of $0.97 per share in the fourth quarter, which fell short of our Zacks Consensus Estimate that called for EPS of $1.04. The company reported revenues of $22.1 billion, which just missed our $22.4 billion estimate.
These results are no indication of what Wells Fargo might report going forward, but they give investors some sense of how the company compared against estimates in its most recently reported quarter.
Price Performance and Surprise History
Another important thing to consider ahead of Wells Fargo’s Q1 report is the company’s history of earnings surprises and the effect that these surprises have had on share prices.
Wells Fargo & Company Price, Consensus and EPS Surprise
We can see that Wells Fargo has posted relatively strong results over the last couple of years. It is also worth noting that Wells Fargo’s stock has performed somewhat inconsistently following the release of its quarterly earnings results.
For instance, Wells Fargo stock surged in the immediate aftermath of an earnings miss last quarter, while its stock price sank following a second quarter earnings beat.
Bottom Line
Past performance does not always guarantee future success. And we can see that Wells Fargo’s price performance has been a bit harder to gauge over its recent scandal-ridden stretch.
Investors should remember that the bank’s bottom line is projected to expand in the first quarter, and note that Wells Fargo is currently a Zacks Rank #3 (Hold).
Wells Fargo is scheduled to report its first quarter 2018 financial results before markets open on Friday, April 13.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
An Early Preview of Wells Fargo's (WFC) Q1 Earnings Outlook
Shares of Wells Fargo (WFC - Free Report) surged near the end of last year, and this momentum carried over into the early part of 2018. Then in early February, Wells Fargo saw its stock price tumble along with many other companies. Now, amid this newly volatile market, investors might be even more focused on Wells Fargo’s upcoming Q1 financial results.
Wells Fargo’s very public and serious business-related scandals, including its massive fake account fiasco, caused some damage to its reputation and its stock price over the last year. These self-inflicted wounds might still taint how outsiders and investors perceive the company. But the real question is: does the perception of Wells Fargo correspond with its current first quarter earnings outlook?
With that said, let’s take a look at what to expect from Wells Fargo’s upcoming Q1 financial results to see if the embattled banking power seems poised to turn things around.
Latest Outlook and Valuation
Wells Fargo’s first quarter revenues are expected to dip by 1.5% to hit $21.67 billion, based on our current Zacks Consensus Estimates. Meanwhile, the bank is projected to see its earnings climb by 6% to reach $1.06 per share.
However, Wells Fargo’s earnings estimate revision activity has been mixed recently. The company has earned two upward earnings estimate revisions and six downward revisions, all within the last 60 days. These revisions lowered Wells Fargo’s consensus earnings estimate by 2 cents.
WFC is currently trading with a Forward P/E of 10.6. This marks a discount compared to the “Banks - Major Regional” industry, which is currently trading at an average of 11.6x forward earnings.
This also marks a discount compared to where Wells Fargo was trading at just a few months ago. Wells Fargo’s newly discounted valuation can be attributed, for the most part, to its recently declining stock price—which far outpaces its industry’s dip.
Most Recent Results
Wells Fargo posted adjusted earnings of $0.97 per share in the fourth quarter, which fell short of our Zacks Consensus Estimate that called for EPS of $1.04. The company reported revenues of $22.1 billion, which just missed our $22.4 billion estimate.
These results are no indication of what Wells Fargo might report going forward, but they give investors some sense of how the company compared against estimates in its most recently reported quarter.
Price Performance and Surprise History
Another important thing to consider ahead of Wells Fargo’s Q1 report is the company’s history of earnings surprises and the effect that these surprises have had on share prices.
Wells Fargo & Company Price, Consensus and EPS Surprise
Wells Fargo & Company Price, Consensus and EPS Surprise | Wells Fargo & Company Quote
We can see that Wells Fargo has posted relatively strong results over the last couple of years. It is also worth noting that Wells Fargo’s stock has performed somewhat inconsistently following the release of its quarterly earnings results.
For instance, Wells Fargo stock surged in the immediate aftermath of an earnings miss last quarter, while its stock price sank following a second quarter earnings beat.
Bottom Line
Past performance does not always guarantee future success. And we can see that Wells Fargo’s price performance has been a bit harder to gauge over its recent scandal-ridden stretch.
Investors should remember that the bank’s bottom line is projected to expand in the first quarter, and note that Wells Fargo is currently a Zacks Rank #3 (Hold).
Wells Fargo is scheduled to report its first quarter 2018 financial results before markets open on Friday, April 13.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>