FXEMPIRE
All
Ad
Corona Virus
Stay Safe, FollowGuidance
World
100,988,153Confirmed
2,171,072Deaths
73,005,404Recovered
Fetching Location Data…
Advertisement
Advertisement
Alan Farley
WFC

Well Fargo & Co. (WFC) is trading at a 10-month high on Tuesday after a key analyst upgrade. The banker has underperformed since 2016 when it got hit with a $185 million fine for creating 1.5 million fake deposit accounts and a half-million fake credit cards. Remediation efforts backfired after 5,300 low level employees were fired, in an effort to deflect blame from the executive office. CEO John Stumpf eventually resigned and gave up millions in compensation.

Advertisement
Know where the Market is headed? Take advantage now with 

75% of retail CFD investors lose money

Bounce-back Effect

The company reports earnings on Friday morning, with Wall Street analysts looking for a profit of $0.61 per-share on $17.4 billion in Q4 2020 revenue. If met, earnings-per-share (EPS) will mark a 34% profit decrease compared to the same quarter in 2019. The stock has posted a negative 20% return since the scandal, underperforming the industry by an astounding 95%. Given these metrics, small improvements in operating results could generate significant upside.

UBS analyst Saul Martinez upgraded the stock to ‘Buy’, noting, “A positive narrative has emerged (for the banking sector): faster economic growth and expansionary fiscal policy drive rising net interest income (NII) and falling credit costs, while the resumption of share buybacks further boosts profitability and EPS. Wells Fargo is now our top pick … and is our sole Buy rated regional bank.”

Advertisement

Wall Street and Technical Outlook

Wall Street consensus has improved in 2021, with widening yields and higher interest rates set to underpin profits. It’s now rated as a ‘Moderate Buy’, based upon 9 ‘Buy’, 6 ‘Hold’, and 0 ‘Sell’ recommendations. Price targets currently range from a low of $27 to a Street-high $40 while the stock opened Tuesday’s U.S. session right on top of the median $34 target. Friday’s confessional could offer a perfect opportunity for analysts to lift ratings and targets.

Wells Fargo hasn’t bounced as strongly as bank sector funds since March 2020’s 11-year low, recouping just one-third of the losses posted since October 2019. However, price action has finally cleared resistance at the 200-day moving average, setting the stage for additional gains up to broken 2019 support in the low 40s. That marks potential upside of more than 30%, making it an interesting January Effect candidate.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US