Wells Fargo & Co. (NYSE: WFC) is expected to release its first-quarter earnings report before the markets open on Thursday. Thomson Reuters consensus estimates call for $0.98 in earnings per share (EPS) on revenue of $21.60 billion. In the same period of last year, the bank posted EPS of $1.04 and $21.28 billion in revenue.
This nationwide, diversified, community-based financial services company has $1.8 trillion in assets. It provides banking, insurance, investments, mortgage and consumer and commercial finance through 8,700 locations, 12,800 ATMs, the internet and mobile banking, and it has offices in 36 countries to support customers who conduct business in the global economy. Wells Fargo serves one in three households in the United States.
Wells Fargo has slowly, but surely, become one of the biggest mortgage lending companies in the United States, in addition to its normal banking and brokerage businesses. A continued increase in commercial real estate lending could really boost the bank’s bottom line and overall revenue. The stock also remains a top Warren Buffett holding.
This mega-bank has little exposure outside of the United States, and 2016 could end up being a transitional year, with slower earnings growth and expenses running higher due to GE acquisitions and tech and cyber upgrades.
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Prior to the release of the earnings report, a few analysts weighed in on Wells Fargo:
- Deutsche Bank reiterated a Buy rating with a $59 price target.
- Sandler O’Neill downgraded it to Hold from Buy and lowered the price target to $51 from $55.
- Guggenheim downgraded it to Neutral from Buy.
- Evercore ISI has a Buy rating but lowered its price target to $53.
So far in 2016m Wells Fargo has underperformed the market, with the stock down about 11%. In the past 52 weeks, the stock is down 10%.
Shares of Wells Fargo were trading up 2.9% at $49.14 Wednesday afternoon, with a consensus analyst price target of $55.57 and a 52-week trading range of $44.50 to $58.77.
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