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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 at $45.92 in the latest trading session, marking a +0.13% move from the prior day. This change lagged the S&P 500's 0.61% gain on the day. Meanwhile, the Dow gained 0.71%, and the Nasdaq, a tech-heavy index, added 0.53%.

Prior to today's trading, shares of the biggest U.S. mortgage lender had lost 2.43% over the past month. This has was narrower than the Finance sector's loss of 3.64% and the S&P 500's loss of 3.77% in that time.

Investors will be hoping for strength from WFC as it approaches its next earnings release, which is expected to be July 14, 2019. In that report, analysts expect WFC to post earnings of $1.17 per share. This would mark year-over-year growth of 8.33%. Our most recent consensus estimate is calling for quarterly revenue of $20.92 billion, down 2.95% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.73 per share and revenue of $83.57 billion. These totals would mark changes of +10.51% and -3.29%, respectively, from last 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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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 past month, the Zacks Consensus EPS estimate remained stagnant. WFC is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that WFC has a Forward P/E ratio of 9.69 right now. This represents a discount compared to its industry's average Forward P/E of 10.86.

Meanwhile, WFC's PEG ratio is currently 0.87. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Banks - Major Regional stocks are, on average, holding a PEG ratio of 1.31 based on yesterday's closing prices.

The Banks - Major Regional industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 62, which puts it in the top 25% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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