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Wells Fargo (WFC) Gains But Lags Market: What You Should Know

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Wells Fargo (WFC - Free Report) closed the most recent trading day at $53.57, moving +0.04% from the previous trading session. This change lagged the S&P 500's 2.12% gain on the day. Elsewhere, the Dow gained 2.13%, while the tech-heavy Nasdaq added 2.64%.

Prior to today's trading, shares of the biggest U.S. mortgage lender had gained 0.04% over the past month. This has outpaced the Finance sector's loss of 2.62% and the S&P 500's loss of 4.4% in that time.

Wall Street will be looking for positivity from WFC as it approaches its next earnings report date. This is expected to be January 11, 2019. On that day, WFC is projected to report earnings of $1.19 per share, which would represent year-over-year growth of 22.68%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $21.27 billion, down 3.53% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.28 per share and revenue of $86.12 billion, which would represent changes of +4.14% and -2.3%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for WFC. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

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 0.61% lower. WFC is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, WFC currently has a Forward P/E ratio of 12.5. This valuation marks a premium compared to its industry's average Forward P/E of 11.64.

Also, we should mention that WFC has a PEG ratio of 1.12. 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 currently had an average PEG ratio of 1.2 as of yesterday's close.

The Banks - Major Regional industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 89, which puts it in the top 35% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow WFC in the coming trading sessions, be sure to utilize Zacks.com.




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