Earnings Preview: What To Expect From Wells Fargo On Friday

By Adam Sarhan, Contributor
SAN FRANCISCO - MARCH 20: The Wells Fargo logo is seen on a sign outside of a Wells Fargo Home Mortgage branch office March 20, 2007 in San Francisco, California. San Francisco based Wells Fargo & Co. announced today that it is cutting over 500 jobs in the home mortgage divisions in South Carolina, Arizona and California that cater to high-risk borrowers. (Photo by Justin Sullivan/Getty Images) Getty Images

Wells Fargo & Company WFC is scheduled to report earnings before Friday’s open. In 2018, the stock hit a record high of $66.31 and is currently trading near $57. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting:

Earnings Preview:

The company is expected to report earnings of $1.09/share on $18.38 billion in revenue. Meanwhile, the so-called Whisper number is a gain of $1.20/share. The Whisper number is the Street's unofficial view on earnings.

Chart & Data Courtesy MarketSmith Inc. Chart & Data Courtesy MarketSmith Inc.

A Closer Look At The Fundamentals:

The company’s earnings grew by double digits over the past three quarters which is a very healthy sign. 2021 was a great year for the company and the stock as both the earnings and the stock price grew nicely.

A Closer Look At The Technicals:

Technically, the stock is acting very well as it just broke out from a big digestion (a.k.a. base) on heavy volume. Typically, whenever you as see a stock break out on heavy volume from a big base that is a sign that the big institutions are accumulating the stock and that tends to be a bullish sign. Going forward, the bulls want to see the stock continue to trade above $52.66 which would mean the break out remains intact.

Pay Attention To How The Stock Reacts To The News:

From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news. Remember, always keep your losses small and never argue with the tape.

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