Wells Fargo & Co. (WFC, Financial), the financial services company headquartered in San Francisco, California, will release its second-quarter 2017 financial results on July 14 before the stock market opens.
For the quarter, analysts forecast the bank will post EPS of $1.01. This is an average of 27 analysts surveyed. The estimate is in line with the comparable quarter of 2016. The analysts’ estimates range between a low of 95 cents and a high of $1.06.
Source: Yahoo Finance
Revenue for the quarter is expected to come in at $22.47 billion on average, a 1.4% upside from a year ago when Wells Fargo posted $22.16 billion in revenue.
Source: Yahoo Finance
The average figure for revenue is the result of 21 estimates of analysts who were surveyed. The analysts’ estimates range between a low of $21.98 billion and a high of $22.84 billion.
As of the first quarter of 2017, Wells Fargo had $1,951.564 billion in total assets. The company’s long-term investments accounted for $1,478.97 billion.
The amount of cash (including noninterest-bearing deposits currently held at other banks) and securities was $816.331 billion.
Total cash and securities includes federal funds sold, short-term investments and trading assets, which – together - account for 38%, and investments in securities.
Total liabilities were $1,750.064 billion, of which approximately 75.8% is the portion for total deposits, including interest-bearing and non-interest-bearing customer deposits.
GuruFocus gives Wells Fargo a financial strength rating of 5 out of 10 and a profitability and growth rating of 6 out of 10.
Wells Fargo has a net profit margin - which measures the bank's overall profitability – of 25.07% versus the industry’s average of 27.56% and the sector’s average of 27.19%. This means Wells Fargo is in line with its peers.
When the company’s loan-to-assets ratio is considered and compared to its peers, Wells Fargo’s operations are more in line with Bank of America (BAC, Financial) than JPMorgan Chase (JPM, Financial) and Citigroup (C, Financial).
Wells Fargo and Bank of America derive more of their income from loans and investments. In contrast, JPMorgan and Citigroup rely more on asset management and trading.
Wells Fargo's return on assets ratio - computed over a trailing 12 months period – is 1.16% versus the industry average of 2.36% and the sector’s average of 2.51%. This ratio indicates the company is less profitable than the industry when it gives loans even though it derives more of its income from loans and investments.
Wells Fargo is currently trading at $55.04 per share on the New York Stock Exchange with a market capitalization of $275.052 billion, a price-earnings (P/E) ratio of 13.76, a price-book (P/B) ratio of 1.54 and a price-sales (P/S) ratio of 3.24.
Multiplying the forward P/E ratio of 12.18 by the average full-year 2017 EPS estimate of $4.14 yields a value of $50.43.
The analysts’ average target price is $58.19. This is the result of 27 estimates ranging between a low of $45 and a high of $65 per share. The recommendation rating is 2.6 out of 5.
Wells Fargo distributes an annual dividend of $1.52 through quarterly payments of 38 cents, for a dividend yield of 2.73% based on the latest closing share price.
Disclosure: I have no positions in any stock mentioned in this article.
