Wells Fargo (WFC) closed at $79.10 in the latest trading session, marking a +1.63% move from the prior day. The stock's change was more than the S&P 500's daily gain of 1.52%. Elsewhere, the Dow saw an upswing of 1.89%, while the tech-heavy Nasdaq appreciated by 1.88%.
Coming into today, shares of the biggest U.S. mortgage lender had lost 7.2% in the past month. In that same time, the Finance sector gained 1.71%, while the S&P 500 gained 1.1%.
Market participants will be closely following the financial results of Wells Fargo in its upcoming release. The company's upcoming EPS is projected at $1.53, signifying a 0.66% increase compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $21.15 billion, indicating a 3.86% growth compared to the corresponding quarter of the prior year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $6.01 per share and revenue of $83.38 billion, indicating changes of +11.92% and +1.32%, respectively, compared to the previous year.
Investors should also pay attention to any latest changes in analyst estimates for Wells Fargo. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the 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, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, there's been a 0.02% rise in the Zacks Consensus EPS estimate. Wells Fargo presently features a Zacks Rank of #3 (Hold).
With respect to valuation, Wells Fargo is currently being traded at a Forward P/E ratio of 12.95. This denotes a discount relative to the industry average Forward P/E of 16.27.
One should further note that WFC currently holds a PEG ratio of 1.18. 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. As the market closed yesterday, the Financial – Investment Bank industry was having an average PEG ratio of 1.52.
The Financial – Investment Bank industry is part of the Finance sector. At present, this industry carries a Zacks Industry Rank of 7, placing it within the top 3% of over 250 industries.
