So if T2 was probably Wells Fargo’s trough, does it buy its shares? So, I get the valuation argument. Wells Fargo, on the other hand, without a similarly sized bargaining unit, could not take advantage of financial market volatility to the same degree. What are my alternatives?I’m not nearly as convinced. 1125 N. Charles St, Baltimore, MD 21201.Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. Wells Fargo is highly exposed to California, where Wells Fargo is the second largest lender. To some extent, this is justified because of its below-average return on equity. Once this happens, profitability should improve and ROE should return to more “normal” levels. This allowed JPMorgan to report one of the best quarters ever for the business unit, which helped tremendously to beat the estimates.

To top it off, the banking giant also announced that its dividend would be reduced by 80% in the future. He also believes that the bank’s moves to increase its credit reserves make sense given the novel coronavirus has taken a big bite out of the economy.Article printed from InvestorPlace Media, https://investorplace.com/2020/07/wells-fargo-stock-wfc-tough-buy-current-environment/.So, if you’re a dividend investor, the question you have to ask yourself is whether you think Wells Fargo can get its dividend back up to 51 cents in a reasonable amount of time. But is Wells Fargo doomed? Analysts forecast EPS of $ 3.70 in 2022, with a long-term EPS growth rate of 8%. Its profitability problems, and an even lower ROE, have only appeared in recent years, mainly due to the additional expenses to clear up its accounting scandal. A dividend cut later this year was expected, but it wasn’t certain that it would happen in July, and most analysts did not expect such a steep drop.Is Wells Fargo a risk-free investment? Everyone’s different, but I’d say 12 to 18 months.Copyright © 2020 InvestorPlace Media, LLC. These cookies do not store any personal information.Wells Fargo released its second quarter results Tuesday morning, announcing that it had lost $ 0.66 per share during the quarter.

“The battle is likely to be a long one and revenue headwinds remain a lingering factor, but we believe the tide is turning on Wells fundamentals.” But it should be noted that, at the end of the financial crisis, Wells Fargo was in fact the best performing in terms of ROE:First, Wells Fargo has no business activity of a size comparable to that of JPMorgan.

If you would like to share your opinion or point of view, you are also welcome to comment below. To some extent, Wells Fargo’s weaker performance can therefore be explained by differences in the respective business model, since the more loan-focused focus of Wells Fargo did not bear fruit in these highly volatile times.If you found this article interesting or useful, it would be greatly appreciated if you “follow me” by clicking on the button at the top, or if you “like this article” below, as this will help me develop an audience and to continue writing about SA. This compares very unfavorably to results that have been published by peers such as JPMorgan (JPM) and Citigroup (C), both of which easily beat the estimates. Let’s take a closer look.But for those who invest with a multi-year horizon and want the best value, Wells Fargo could still be a good choice.This comes despite the fact that Wells Fargo has the smallest asset base among these three banks. Is the bank in big trouble? A decrease in provisions in the coming quarters will translate into higher profitability, all other things being equal.From now on, things seem better for Wells Fargo, I think.

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