Market Overview

Wells Fargo's Earnings Outlook

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On Friday, January 15, Wells Fargo (NYSE:WFC) will release its latest earnings report. Check out Benzinga's preview to understand the implications.

Net Income, Earnings, And Earnings Per Share

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Wall Street analysts see Wells Fargo reporting earnings of $0.59 per share on sales of $18.11 billion. In the same quarter last year, Wells Fargo announced EPS of $0.93 on revenue of $19.86 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

If the company were to match the consensus estimate when it reports Friday, earnings would be down 36.56%. Sales would be down 8.81% from the same quarter last year. Here is how the company's EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020
EPS Estimate 0.45 -0.20 0.36 1.12
EPS Actual 0.42 -0.66 0.80 0.93
Revenue Estimate 17.97 B 18.40 B 19.35 B 20.12 B
Revenue Actual 18.86 B 17.84 B 17.72 B 19.86 B

Stock Performance

Shares of Wells Fargo were trading at $33.805 as of January 13. Over the last 52-week period, shares are down 30.27%. Given that these returns are generally negative, long-term shareholders are likely a little upset going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Wells Fargo is scheduled to hold the call at 10:00:00 ET and can be accessed here.

 

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