Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Is Wells Fargo & Co (WFC) Still the Best Bank in the Business?

Page 1 of 2

Wells Fargo & Co (NYSE:WFC) will release its quarterly earnings report on Friday, and some investors are already concerned about the potential for a disappointment. With mortgage rates having risen sharply in recent weeks, the banking giant is facing a likely decline in refinancing activity, and a drop in new purchase mortgages could be right around the corner, choking off a vital source of earnings for Wells Fargo.

Wells Fargo & Co (NYSE:WFC)

Still, Wells Fargo & Co (NYSE:WFC) has put together a good track record of holding its own even in tough economic conditions. Shareholders seem optimistic as the stock has performed quite well lately. Let’s take an early look at what’s been happening with Wells Fargo over the past quarter and what we’re likely to see in its quarterly report.

Stats on Wells Fargo

Analyst EPS Estimate $0.92
Change From Year-Ago EPS 12%
Revenue Estimate $21.20 billion
Change From Year-Ago Revenue (0.4%)
Earnings Beats in Past 4 Quarters 4

Source: Yahoo! Finance.

Can Wells Fargo keep its earnings-beat streak alive?
Analysts have raised their views on Wells Fargo & Co (NYSE:WFC)’s earnings in recent months, kicking up their June-quarter estimates by a penny per share and raising their full-year 2013 consensus by more than a nickel per share. The stock has also performed admirably, with gains of about 15% since early April.

One big reason Wells Fargo & Co (NYSE:WFC)’s stock has done so well is that the bank has managed to keep its fundamentals strong. In April, the company reported record quarterly net income with total loan growth coming in at 4.2% because of increased activity in the commercial lending space. Deposits were also higher, and the bank has done a good job of keeping its capital ratios high in the face of Fed stress tests and regulatory scrutiny.

Still, flagging mortgage activity could prove to be problematic for Wells Fargo & Co (NYSE:WFC). Last quarter, mortgage originations fell by 16%, and the big rise in rates could push those levels downward even further. Yet Wells has a big advantage over Bank of America Corp (NYSE:BAC) and JPMorgan Chase & Co.(NYSE:JPM) in that it has seen delinquency rates and foreclosure ratios that are much lower than those of its competitors. B of A’s delinquency rate was about double that of Wells Fargo, and Wells came in more than 30% lower than JPMorgan’s delinquency rate. Loan quality should be able to help Wells weather the mortgage storm better than its rivals.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!