Wells Fargo (WFC, $23.95) has steeper-than-expected Q2 loss; slashes dividend
On Tuesday, Wells Fargo reported a second-quarter loss wider than anticipated by analysts. The bank also cut its dividend as coronavirus pandemic continues to wreak havoc in the economy.
Wells Fargo ‘s net loss for the quarter came in at -$2.4 billion, or -66 cents a share, compared to income of +$6.2 billion, or +$1.30 a share in the year-ago quarter. The loss was steeper than -16 cents a share loss expected by analysts polled by FactSet.
Revenue of $17.8 billion was lower than year-ago quarter’s $21.6 billion.
Net interest income of $9.88 billion fell -$2.2 billion year-over-year. Non-interest income was $8 billion, down -$1.5 billion year-over-year.
Average deposits was $1.4 trillion, up + 9% from a year earlier.
The company affirmed its plans to slash its dividend to 10 cents a share from the 51 cents – a cut greater than what analysts expected.
Tickeron's AI-powered scorecard rates WFC a Strong Sell.
WFC's in Downtrend: Moving Average Convergence Divergence (MACD) Histogram crosses below signal line
This is a Bearish indicator signaling WFC's price could decline. Traders may explore shorting the ticker or looking at put options. In 27 of 41 cases where WFC's MACD histogram became negative, the price fell further within the following month. The odds of a continued Downtrend are 66%.
Current price $23.86 is below $23.92 the lowest support line found by A.I. Throughout the month of 06/10/20 - 07/13/20, the price experienced a -14% Downtrend. During the week of 07/06/20 - 07/13/20, the stock fell -0.31%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The RSI Indicator appears to be shifting from an Uptrend to a Downtrend. In 18 of 35 cases where WFC's RSI indicator exited the overbought zone, the price fell further within the following month. The odds of a continued Downtrend are 51%.
The price moved below its 50-day Moving Average, which indicates a reversal from an Uptrend to a Downtrend. In 19 of 34 cases where WFC's price crossed below its 50-day Moving Average, its price fell further within the subsequent month. The odds of a continued Downtrend are 56%.
The 10-day Moving Average for this ticker crossed below its 50-day Moving Average on June 30, 2020. This can be construed as a sell signal, indicating that the trend is shifting lower. In 9 of 16 cases where WFC's 10-day Moving Average crossed below its 50-day Moving Average, its price fell further within the subsequent month. The odds of a continued Downtrend are 56%.
The Aroon Indicator entered a Downtrend today. In 114 of 220 cases where WFC Aroon's Indicator entered a Downtrend, the price fell further within the following month. The odds of a continued Downtrend are 52%.
Bullish Trend Analysis
The Stochastic Indicator suggests the ticker price trend may be in a reversal from a Downtrend to an Uptrend. 28 of 55 cases where WFC's Stochastic Indicator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued Uptrend are 51%.
The Momentum Indicator exceeded the 0 level on July 13, 2020. Traders may consider buying the ticker or exploring call options. In 45 of 87 cases where the ticker's Momentum Indicator exceeded 0, its price rose further within the subsequent month. The odds of a continued Uptrend are 52%.
Fundamental Analysis (Ratings)
Tickeron has a negative outlook on this ticker and predicts a further decline by more than 4.00% within the next month with a likelihood of 66%. During the last month, the daily ratio of advancing to declining volumes was 1.13 to 1.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. WFC’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 92, placing this stock worse than average.
The Tickeron SMR rating for this company is 91 (best 1 - 100 worst), indicating slightly better than average sales and a considerably profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 64 (best 1 - 100 worst), indicating fairly steady price growth. WFC’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 53 (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 7 (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.66) is normal, around the industry mean (0.89). P/E Ratio (8.97) is within average values for comparable stocks, (9.01). Projected Growth (PEG Ratio) (1.15) is also within normal values, averaging (7.01). Dividend Yield (3.57) settles around the average of (2.78) among similar stocks. P/S Ratio (1.24) is also within normal values, averaging (1.52).
WFC's MACD Histogram just turned positive
The Moving Average Convergence Divergence (MACD) for WFC turned positive on April 19, 2024. Looking at past instances where WFC's MACD turned positive, the stock continued to rise in of 44 cases over the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on April 17, 2024. You may want to consider a long position or call options on WFC as a result. In of 85 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where WFC advanced for three days, in of 315 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The RSI Indicator has been in the overbought zone for 2 days. Expect a price pull-back in the near future.
The Stochastic Oscillator has been in the overbought zone for 2 days. Expect a price pull-back in the near future.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where WFC declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
WFC broke above its upper Bollinger Band on April 18, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for WFC entered a downward trend on April 17, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. WFC’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 59, placing this stock slightly better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.227) is normal, around the industry mean (0.945). P/E Ratio (11.928) is within average values for comparable stocks, (8.857). WFC's Projected Growth (PEG Ratio) (24.155) is very high in comparison to the industry average of (2.584). Dividend Yield (0.023) settles around the average of (0.100) among similar stocks. P/S Ratio (2.595) is also within normal values, averaging (2.430).
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