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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 the most recent trading day at $44.98, moving +1.26% from the previous trading session. This change outpaced the S&P 500's 1.1% gain on the day. Elsewhere, the Dow gained 1.05%, while the tech-heavy Nasdaq added 1.32%.

Heading into today, shares of the biggest U.S. mortgage lender had lost 7.63% over the past month, lagging the Finance sector's loss of 6.43% and the S&P 500's loss of 5.05% in that time.

Wall Street will be looking for positivity from WFC as it approaches its next earnings report date. The company is expected to report EPS of $1.19, up 5.31% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $20.79 billion, down 5.25% from the prior-year quarter.

WFC's full-year Zacks Consensus Estimates are calling for earnings of $4.80 per share and revenue of $83.54 billion. These results would represent year-over-year changes of +12.15% and -3.32%, respectively.

It is also important to note the recent changes to analyst estimates for WFC. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. The Zacks Consensus EPS estimate has moved 0.07% lower within the past month. WFC is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, WFC is currently trading at a Forward P/E ratio of 9.26. This valuation marks a discount compared to its industry's average Forward P/E of 10.38.

It is also worth noting that WFC currently has a PEG ratio of 0.87. 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. The Banks - Major Regional industry currently had an average PEG ratio of 1.25 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 229, which puts it in the bottom 11% 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.

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


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