Wells Fargo (WFC) Gains As Market Dips: What You Should Know

Wells Fargo (WFC) closed at $48.89 in the latest trading session, marking a +0.68% move from the prior day. This change outpaced the S&P 500's 0.75% loss on the day. At the same time, the Dow lost 0.3%, and the tech-heavy Nasdaq lost 0.23%.

Heading into today, shares of the biggest U.S. mortgage lender had lost 4.93% over the past month, lagging the Finance sector's loss of 3.61% and the S&P 500's loss of 0.13% in that time.

Wells Fargo will be looking to display strength as it nears its next earnings release. On that day, Wells Fargo is projected to report earnings of $1.11 per share, which would represent year-over-year growth of 73.44%. Meanwhile, our latest consensus estimate is calling for revenue of $18.34 billion, up 2.33% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.63 per share and revenue of $75.59 billion. These totals would mark changes of +1029.27% and +4.49%, respectively, from last year.

Investors might also notice 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.24% higher within the past month. Wells Fargo currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Wells Fargo is holding a Forward P/E ratio of 10.49. For comparison, its industry has an average Forward P/E of 10.78, which means Wells Fargo is trading at a discount to the group.

Also, we should mention that WFC has a PEG ratio of 1.03. 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 Banks - Major Regional industry currently had an average PEG ratio of 1.29 as of yesterday's close.

The Banks - Major Regional industry is part of the Finance sector. This group has a Zacks Industry Rank of 96, putting it in the top 38% 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.

To follow WFC in the coming trading sessions, be sure to utilize Zacks.com.

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