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Wells Fargo (WFC) Sees a More Significant Dip Than Broader Market: Some Facts to Know

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Wells Fargo (WFC - Free Report) closed the latest trading day at $56.15, indicating a -0.53% change from the previous session's end. The stock trailed the S&P 500, which registered a daily loss of 0.2%. Meanwhile, the Dow experienced a drop of 0.15%, and the technology-dominated Nasdaq saw a decrease of 0.34%.

The biggest U.S. mortgage lender's shares have seen a decrease of 4.55% over the last month, not keeping up with the Finance sector's gain of 2.22% and the S&P 500's gain of 1.93%.

The upcoming earnings release of Wells Fargo will be of great interest to investors. The company's earnings per share (EPS) are projected to be $1.27, reflecting an 8.63% decrease from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $20.4 billion, down 2.2% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $5.10 per share and revenue of $82.29 billion, which would represent changes of -6.08% and -0.38%, respectively, from the prior year.

It is also important to note the recent changes to 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 take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been a 0.17% rise in the Zacks Consensus EPS estimate. Wells Fargo presently features a Zacks Rank of #3 (Hold).

In terms of valuation, Wells Fargo is currently trading at a Forward P/E ratio of 11.07. This valuation marks a discount compared to its industry's average Forward P/E of 12.05.

Meanwhile, WFC's PEG ratio is currently 1.4. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As of the close of trade yesterday, the Banks - Major Regional industry held an average PEG ratio of 1.46.

The Banks - Major Regional industry is part of the Finance sector. Currently, this industry holds a Zacks Industry Rank of 47, positioning it in the top 19% 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.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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