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

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Wells Fargo (WFC - Free Report) closed the most recent trading day at $23.66, moving -1.6% from the previous trading session. This move lagged the S&P 500's daily gain of 1.05%. At the same time, the Dow added 0.52%, and the tech-heavy Nasdaq gained 1.72%.

Heading into today, shares of the biggest U.S. mortgage lender had lost 1.84% over the past month, outpacing the Finance sector's loss of 2.6% and the S&P 500's loss of 3.29% in that time.

WFC will be looking to display strength as it nears its next earnings release, which is expected to be October 14, 2020. In that report, analysts expect WFC to post earnings of $0.36 per share. This would mark a year-over-year decline of 60.87%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.85 billion, down 18.92% from the year-ago period.

WFC's full-year Zacks Consensus Estimates are calling for earnings of $0.02 per share and revenue of $71.58 billion. These results would represent year-over-year changes of -99.54% and -15.86%, respectively.

Any recent changes to analyst estimates for WFC should also be noted by investors. 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. 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 59.52% lower. WFC is currently a Zacks Rank #4 (Sell).

In terms of valuation, WFC is currently trading at a Forward P/E ratio of 1555.53. Its industry sports an average Forward P/E of 13.68, so we one might conclude that WFC is trading at a premium comparatively.

Meanwhile, WFC's PEG ratio is currently 160.28. 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. WFC's industry had an average PEG ratio of 2.15 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 187, which puts it in the bottom 27% 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.

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


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