Back to top

Image: Bigstock

Wells Fargo (WFC) Advances But Underperforms Market: Key Facts

Read MoreHide Full Article

Wells Fargo (WFC - Free Report) closed at $38.97 in the latest trading session, marking a +0.78% move from the prior day. The stock lagged the S&P 500's daily gain of 0.81%. Elsewhere, the Dow gained 0.39%, while the tech-heavy Nasdaq added 1.35%.

The biggest U.S. mortgage lender's stock has dropped by 6.91% in the past month, falling short of the Finance sector's loss of 6.45% and the S&P 500's loss of 6.19%.

Analysts and investors alike will be keeping a close eye on the performance of Wells Fargo in its upcoming earnings disclosure. The company's earnings report is set to go public on October 13, 2023. The company is expected to report EPS of $1.23, down 5.38% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $20.22 billion, up 3.69% from the prior-year quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $4.84 per share and revenue of $81.31 billion. These totals would mark changes of +54.14% and +10.2%, respectively, from last year.

Investors should also pay attention to any latest changes in analyst estimates for Wells Fargo. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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. Over the past month, the Zacks Consensus EPS estimate has shifted 0.04% downward. At present, Wells Fargo boasts a Zacks Rank of #3 (Hold).

In terms of valuation, Wells Fargo is presently being traded at a Forward P/E ratio of 8. This indicates a premium in contrast to its industry's Forward P/E of 7.62.

We can additionally observe that WFC currently boasts a PEG ratio of 0.78. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Banks - Major Regional industry held an average PEG ratio of 1.2.

The Banks - Major Regional industry is part of the Finance sector. This group has a Zacks Industry Rank of 187, putting it in the bottom 26% of all 250+ industries.

The Zacks Industry Rank is ordered 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.

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Wells Fargo & Company (WFC) - free report >>

Published in