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

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Wells Fargo (WFC - Free Report) closed at $28.29 in the latest trading session, marking a +0.6% move from the prior day. This move outpaced the S&P 500's daily gain of 0.47%. Meanwhile, the Dow gained 0.95%, and the Nasdaq, a tech-heavy index, added 2.3%.

Coming into today, shares of the biggest U.S. mortgage lender had lost 40.29% in the past month. In that same time, the Finance sector lost 35.64%, while the S&P 500 lost 28.7%.

Investors will be hoping for strength from WFC as it approaches its next earnings release, which is expected to be April 14, 2020. On that day, WFC is projected to report earnings of $0.83 per share, which would represent a year-over-year decline of 30.83%. Meanwhile, our latest consensus estimate is calling for revenue of $19.50 billion, down 9.76% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.86 per share and revenue of $78.97 billion, which would represent changes of -11.87% and -7.17%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for WFC. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 5.32% lower. 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 7.28 right now. This represents a premium compared to its industry's average Forward P/E of 7.12.

Investors should also note that WFC has a PEG ratio of 0.68 right now. 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. WFC's industry had an average PEG ratio of 0.79 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 181, which puts it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

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


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