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Wells Fargo (WFC) Dips More Than Broader Markets: What You Should Know

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Wells Fargo (WFC - Free Report) closed at $28.64 in the latest trading session, marking a -1.51% move from the prior day. This change lagged the S&P 500's 0.44% loss on the day. Meanwhile, the Dow lost 0.62%, and the Nasdaq, a tech-heavy index, added 0.5%.

Coming into today, shares of the biggest U.S. mortgage lender had gained 15.02% in the past month. In that same time, the Finance sector gained 3.36%, while the S&P 500 gained 1.39%.

Investors will be hoping for strength from WFC as it approaches its next earnings release. The company is expected to report EPS of $0.60, down 35.48% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $17.93 billion, down 9.7% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.41 per share and revenue of $72.31 billion. These totals would mark changes of -90.64% and -14.99%, respectively, from last year.

Any recent changes to analyst estimates for WFC should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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 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 has moved 1.76% higher. WFC is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note WFC's current valuation metrics, including its Forward P/E ratio of 70.01. For comparison, its industry has an average Forward P/E of 14.01, which means WFC is trading at a premium to the group.

We can also see that WFC currently has a PEG ratio of 7.21. 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 1.99 as of yesterday's close.

The Banks - Major Regional industry is part of the Finance sector. This group has a Zacks Industry Rank of 85, putting it in the top 34% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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