In the latest trading session, Wells Fargo (WFC) closed at $45.65, marking a -0.98% move from the previous day. This change lagged the S&P 500's daily gain of 0.3%. Elsewhere, the Dow gained 0.15%, while the tech-heavy Nasdaq added 0.42%.
Prior to today's trading, shares of the biggest U.S. mortgage lender had lost 0.5% over the past month. This has lagged the Finance sector's gain of 2.14% and the S&P 500's gain of 2.2% in that time.
Investors will be hoping for strength from WFC as it approaches its next earnings release, which is expected to be July 16, 2019. On that day, WFC is projected to report earnings of $1.16 per share, which would represent year-over-year growth of 7.41%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $20.92 billion, down 2.95% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.70 per share and revenue of $83.48 billion. These totals would mark changes of +9.81% and -3.39%, respectively, from last year.
Any recent changes to analyst estimates for WFC should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 0.68% lower within the past month. WFC is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, WFC is currently trading at a Forward P/E ratio of 9.81. For comparison, its industry has an average Forward P/E of 10.88, which means WFC is trading at a discount to the group.
It is also worth noting that WFC currently has a PEG ratio of 0.88. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Banks - Major Regional was holding an average PEG ratio of 1.32 at yesterday's closing price.
The Banks - Major Regional industry is part of the Finance sector. This group has a Zacks Industry Rank of 98, putting it in the top 39% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
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