Banking, finance, and taxes

What to Expect When Wells Fargo Reports Friday Morning

Chris Lange

Published: January 11, 2018 12:55 pm

Last Updated: January 12, 2020 4:34 am

Wells Fargo & Co. (NYSE: WFC) is scheduled to release its fourth-quarter financial results before the markets open on Friday. The consensus estimates from Thomson Reuters are calling for $1.05 in earnings per share (EPS) and $22.34 billion in revenue. In the same period of last year, the financial giant said it had EPS of $0.96 and $21.58 billion in revenue.

This bank was at the forefront of the news cycle in 2017 concerning the bank’s sales practices and the opening of fake accounts. While this ultimately ended up with CEO John Stumpf stepping down, many have questioned whether the culture has really changed. Wells Fargo will have the chance to prove itself to its customers and investors in 2018, and that starts with its fourth-quarter earnings report.

Even during this quarter, it’s been proved that the bank is not off the hook yet after a federal regulator said that it was considering formal enforcement action in regards to the bank’s deals in auto-insurance and mortgage operations.

In a letter sent in November by the Office of the Comptroller of the Currency (OCC), the agency said that Wells Fargo had willingly harmed customers in these two business segments. It further went on to say that Wells Fargo had repeatedly failed to correct other issues stemming from an even broader range of its business segments.

Although these are some glaring problems facing Wells Fargo, the bank stands to benefit greatly from the recent tax reform law.

In its most recent quarterly report, the bank said that it had a book value per share of $36.96, and a tangible book value per share of $31.03.

While we are only eight trading days into the New Year, Wells Fargo shares are up about 4% so far. Over the past 52 weeks, the stock is up over 15%.

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Prior to the release of the earnings report, a few analysts weighed in on Wells Fargo:

• Atlantic Securities has a Neutral rating with a $64 price target.
• BMO Capital Markets has a Hold rating with a $59 price target.
• Sanford Bernstein has an Outperform rating with a $69 target.
• Barclays has an Overweight rating and a $75 price target.
• Buckingham Research has a Buy rating and a $75 price target.

Shares of Wells Fargo were last seen at $62.76, with a consensus analyst price target of $63.95 and a 52-week trading range of $49.27 to $63.40.