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The latest trading session saw Wells Fargo (WFC) ending at $74.16, denoting a +1.17% adjustment from its last day's close. The stock outperformed the S&P 500, which registered a daily gain of 1.12%. On the other hand, the Dow registered a gain of 1.14%, and the technology-centric Nasdaq increased by 1.46%.
The biggest U.S. mortgage lender's shares have seen a decrease of 7.76% over the last month, not keeping up with the Finance sector's loss of 1.89% and the S&P 500's loss of 4.13%.
The investment community will be closely monitoring the performance of Wells Fargo in its forthcoming earnings report. The company is expected to report EPS of $1.24, down 1.59% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $20.89 billion, reflecting a 0.14% rise from the equivalent quarter last year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $5.87 per share and a revenue of $85.17 billion, indicating changes of +9.31% and +3.5%, respectively, from the former year.
It is also important to note the recent changes to analyst estimates for Wells Fargo. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, 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 0.65% rise in the Zacks Consensus EPS estimate. Wells Fargo is currently a Zacks Rank #1 (Strong Buy).
From a valuation perspective, Wells Fargo is currently exchanging hands at a Forward P/E ratio of 12.48. This valuation marks a discount compared to its industry's average Forward P/E of 13.26.
It is also worth noting that WFC currently has a PEG ratio of 1.1. 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. The Financial - Investment Bank industry had an average PEG ratio of 1.08 as trading concluded yesterday.
The Financial - Investment Bank industry is part of the Finance sector. Currently, this industry holds a Zacks Industry Rank of 3, positioning it in the top 2% of all 250+ industries.