Wells Fargo expected to deliver in 2015

After a wobble in September and October, 2014 ended as a very successful year for Wells Fargo, and markets are expecting another stead performance in 2015.

Wells Fargo logo
Source: Bloomberg

On Wednesday 14 January Wells Fargo is due to post its fourth-quarter figures. The adjusted earnings per share have been called slightly lower at $1.015 down from $1.02. Sales are also expected to be a touch weaker at $21.226 billion down from $21.435 billion. However, even with these slightly softer figures, the company’s pre-tax profits are expected to grow from $8.597 billion up to $8.601 billion.

Parallel to the increasing resilience of the US economy over the past year, the housing market has continued to recover from the carnage of five years ago. Wells Fargo continues to be the second largest bank offering home-equity loans, and also has the largest book of commercial real estate mortgages.

From the start of 2014 to today, shares in San Francisco-based Wells Fargo has increased by 17.77%, even with its aggressive selloff in September and October last year. Institutional opinion on the company is still broadly positive, with 16 buy recommendations, 20 holds and only one sell. The average price target is $56.53, still offering a premium to the current levels around $53.2. At these levels the shares are just back above the 100-day moving average and hovering below the 50-day moving average.

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