Wells Fargo Beats Earnings Estimates in 3Q15

During the third quarter, Wells Fargo said it had revenues of $21.9 billion, ~0.7 billion, or 3.3% more than a year ago when the bank reported total bank revenues of $21.2 billion.

The banking giant posted third-quarter adjusted earnings of $1.31 per share, up from $1.15 in the year-earlier period.

Among the analysts, the highest expected of earnings per a share was $ 1.18, and the lowest is $ 1.08. The business’s quarter revenue was up 3.1% compared to the same quarter last year. However, it is important to note here, that the drop in top line figures was not as negative as feared by analysts, as the bank performed considerably well in a significantly volatile macroeconomic environment.

Third quarter (3Q) earnings season started on Tuesday this week. Interest rates are the dominant factor driving a bank’s earnings. Jefferies Group lowered their price objective on Wells Fargo from $62.00 to $59.00 and set a buy rating on the stock in a report on Tuesday, October 6th.

Importantly, the market had a considerably muted reaction to Bank of America’s third quarter earnings release. Still, Goldman stock was up 1 percent on a day that saw the financial sector rebounding from Wednesday’s declines. The firm has a market capitalization of $269.68 billion and a P/E ratio of 12.7512. He owns 155,000 shares of Wells Fargo & Co and intends to slash the exposure to financial stock on lower interest rates, and a flattening yield curve.

Citigroup delivered quarterly earnings that topped analysts’ expectations on Thursday.

Net interest income declined 6.7 percent to $9.74 billion on a fully taxable equivalent basis, while bond trading revenue fell 10.9 percent to $2 billion.

Wells Fargo & Co opened the session in $51.98, trading in a range of $51.76- $52.41, and was at $52.36. It suffered from a $1.5 billion drop in noninterest income, primarily from a decrease in trading income. Keeping this in mind, the GE’s goal is to sell GE Capital’s assets of around $120 billion to $150 billion this year.

National Funding and Wells Fargo have worked together for several years.

Like JPMorgan and Bank of America, Wells reported a noticeable increase in deposits, which rose 6 percent to $1.2 trillion.

Overall, banks are under considerable pressure to improve their income generation capacity, given the current instability in the markets.

It is unclear when the U.S. Federal Reserve will hike interest rates, but Fed Chair Janet Yellen recently said she supports raising rates this year. Finally, Deutsche Bank upgraded the stock to “Buy” rating in a September 8 report. The turbulence injected further chaos when trading volumes rose to record highs offsetting an acute sell-off. Wells Fargo & Company distance from 50-day simple moving average (SMA50) is -3.51%. Three analysts have rated the stock with a sell rating, nine have assigned a hold rating, seventeen have assigned a buy rating and one has issued a strong buy rating on the company’s stock.

Daily Journal Corp had the biggest stake with ownership of 1.59 million shares as of Q2 2015 for 66.2% of the long stock exposure.

JPMorgan Chase & Co and Bank of America Inc reported a fall on both measures as low interest rates squeeze the spread between the banks’ cost of funds and the interest earned from loans and securities. These positive trends were enough to ensure that Wells Fargo’s share price regained almost all its lost value by the end of the day.