Wells Fargo (WFC, $44.93) beats Q2 earnings expectations, amid release of $1.6 billion credit loss reserves
Wells Fargo on Wednesday reported second-quarter earnings and revenue results that topped Wall Street’s expectations, as the bank continued to release reserves that it had set aside as cushion against pandemic-induced loan loss risks.
The financial behemoth’s earnings for the quarter came in at $1.38, beating the 97 cents a share expected by analysts polled by Refinitiv. The quarter marked a sharp rebound from the loss it incurred in the year-ago quarter.
Revenue rose +10% year-over-year to $20.27 billion, vs. $17.77 billion expected by analysts surveyed by Refinitiv.
Wells Fargo released $1.6 billion of its credit loss reserves as consumers perform better than the bank expected amid the pandemic-induced recession.
The bank’s net interest margin was 2.02% for the quarter, compared to analysts’ expectation of 2.05% (according to FactSet).
Momentum Indicator for WFC turns negative, indicating new downward trend
WFC saw its Momentum Indicator move below the 0 level on April 21, 2022. This is an indication that the stock could be shifting in to a new downward move. Traders may want to consider selling the stock or exploring put options. Tickeron's A.I.dvisor looked at 84 similar instances where the indicator turned negative. In 56 of the 84 cases, the stock moved further down in the following days. The odds of a decline are at 67%.
Current price $42.18 crossed the support line at $43.91 and is trading between $43.91 support and $41.34 support lines. Throughout the month of 04/13/22 - 05/16/22, the price experienced a -13% Downtrend. During the week of 05/09/22 - 05/16/22, the stock fell -4%.
The Moving Average Convergence Divergence Histogram (MACD) for WFC turned negative on May 10, 2022. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 48 similar instances when the indicator turned negative. In 31 of the 48 cases the stock turned lower in the days that followed. This puts the odds of success at 65%.
The 50-day Moving Average for WFC moved below the 200-day moving average on May 02, 2022. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
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 50 of 62 cases within the following month. The odds of a continued downward trend are 57%.
The Aroon Indicator for WFC entered a downward trend on May 16, 2022. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where WFC's RSI Indicator exited the oversold zone, 16 of 25 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 64%.
The Stochastic Indicator shows that the ticker has stayed in the oversold zone for 3 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a +5.29% 3-day Advance, the price is estimated to grow further. Considering data from situations where WFC advanced for three days, in 167 of 306 cases, the price rose further within the following month. The odds of a continued upward trend are 55%.
WFC may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
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 76%. During the last month, the daily ratio of advancing to declining volumes was 1 to 1.72.
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 81, placing this stock worse than average.
The Tickeron PE Growth Rating for this company is 93 (best 1 - 100 worst), pointing to worse than average 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 90 (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 (1.015) is normal, around the industry mean (0.974). P/E Ratio (8.865) is within average values for comparable stocks, (18.052). WFC's Projected Growth (PEG Ratio) (13.064) is very high in comparison to the industry average of (2.137). WFC has a moderately low Dividend Yield (0.021) as compared to the industry average of (0.052). P/S Ratio (2.210) is also within normal values, averaging (2.603).
The Tickeron Price Growth Rating for this company is 63 (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 Seasonality Score of 28 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron SMR rating for this company is 2 (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.
Major banks are among the biggest companies in the world, often times with global reach and market capitalizations in the multi-billions. Large banks often have multiple arms spanning different disciplines, from deposits, to investment banking, to wealth management and insurance. The biggest banks often have key competitive advantages over smaller players in the industry in terms of brand recognition, cost of capital, and efficiency. Think J.P. Morgan, Bank of America, Wells Fargo, and Citigroup.
The average market capitalization across the Major Banks Industry is 74.3B. The market cap for tickers in the group ranges from 191.4M to 349.8B. JPM holds the highest valuation in this group at 349.8B. The lowest valued company is MSL at 191.4M.
The average weekly price growth across all stocks in the Major Banks Industry was 0.29%. For the same Industry, the average monthly price growth was -4.96%, and the average quarterly price growth was -6.9%. INGVF experienced the highest price growth at 8.42%, while BNDSY experienced the biggest fall at -12.99%.
- 3/23/22 4:50 AM: Wells Fargo & Co (WFC, $53.39) was a top weekly gainer, with a +6.55% jump
- 3/15/22 5:19 AM: Wells Fargo & Co (WFC, $49.86) was a top weekly gainer, with a +8.84% jump
- 2/23/22 5:33 AM: Wells Fargo & Co (WFC, $55.28) was a top loser this week, declining -5.31%
The average weekly volume growth across all stocks in the Major Banks Industry was -7.61%. For the same stocks of the Industry, the average monthly volume growth was 14.44% and the average quarterly volume growth was 87.11%
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Stocks in the group have a Negative Outlook today, backed by the MA200MA50 Indicator. Tickeron has a negative outlook on this group and predicts a further decline by more than 4.00% within the next month with a likelihood of 45%. During the last month, the daily ratio of advancing to declining volumes was 1 to 1.49.
21 stocks in the group of tickers confirmed the negative outlook based on the MA50MA10 indicator with average odds of 64%.
The most notable companies in this group are JPMorgan Chase & Co (NYSE:JPM), Bank of America Corp (NYSE:BAC), Wells Fargo & Co (NYSE:WFC), HSBC Holdings PLC (NYSE:HSBC), US Bancorp (NYSE:USB), PNC Financial Services Group (NYSE:PNC), Capital One Financial (NYSE:COF), Itau Unibanco Holding SA (NYSE:ITUB), Banco Bradesco SA (NYSE:BBD), Bank of New York Mellon Corp (NYSE:BK).
The average market capitalization across the group is 35.4B. The market cap for tickers in the group ranges from 0 to 349.8B. JPM holds the highest valuation in this group at 349.8B. The lowest valued company is BAFI at 0.
- 5/14/22 4:22 AM: Bank of China (BACHF, $0.38), market cap jumped by $20.8B
- 5/3/22 8:18 AM: Industrial and Commercial Bank of China (IDCBF, $0.57), market cap jumped by $42.5B
- 4/22/22 6:39 AM: Industrial and Commercial Bank of China (IDCBF, $0.58), market cap jumped by $35.3B
The average weekly price growth across all stocks in the group was 0.16%. For the same group, the average monthly price growth was -5.8%, and the average quarterly price growth was -8.26%. UNCFF experienced the highest price growth at 20.96%, while ALBKF experienced the biggest fall at -21.08%.
- 5/14/22 4:23 AM: Banco Bradesco SA (BBD, $3.78) was a top weekly gainer, with a +6.48% jump. Expect an Uptrend reversal
- 5/12/22 5:38 AM: Mitsubishi UFJ Financial Group (MUFG, $5.59) was a top loser this week, declining -7.14%. Expect a Downtrend reversal
- 5/11/22 7:46 AM: Pinnacle Bankshares (PPBN, $22.55) was a top loser this week, declining -5.05%
The average weekly volume growth across all stocks in the group was 5.73%. For the same stocks of the group, the average monthly volume growth was 231.5% and the average quarterly volume growth was 96.68%
- 5/13/22 4:49 AM: The volume for OFG Ban stock increased for four consecutive days, resulting in a record-breaking daily growth of 93% of the 65-Day Volume Moving Average
- 5/13/22 4:49 AM: The volume for Toronto Dominion Bank stock increased for a consecutive 5 days, with an average daily gain of 104%
- 5/12/22 5:32 AM: The volume for Toronto Dominion Bank stock increased for a consecutive 5 days, with an average daily gain of 105%
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
|STOCK / NAME||PRICE $||CHG $||CHG %|
Unicredito Spa Roma
Unicredito SPA American Depositary Receipts - Unsponsored (Italy)
Itau Unibanco Holding SA
Grupo Supervielle SA
Banco Bradesco SA