WFC is staging a bounce ahead of its earnings report
Wells Fargo & Co (NYSE:WFC) is slated to step into the earnings confessional before the market opens on Friday, Oct. 11. Zacks analysts expect the bank giant to report third-quarter earnings of $1.27 per share on revenue of $20.38 billion report. Ahead of the event, options traders are betting bullishly.
WFC finished five of its last eight post-earnings sessions lower, including a 6% drop this past June. Over the last two years, Wells Fargo stock averaged a 2.3% swing, regardless of direction, which is significantly smaller than the 6.1% move the options pits are pricing in this time around.
Ahead of the event, Wolfe Research upgraded WFC to "outperform" from "peer perform" with a new $65 target price, saying the stock's valuation factors in the rate-sensitive financial sector. Of the 26 analysts in coverage, 11 carry a "hold" rating, while the 12-month consensus price target of $63.62 is a relatively slim premium to current levels, meaning more bull notes could arise should earnings beat estimates.
On track for its third-straight daily gain, WFC was last seen 0.9% higher at $57.65. The stock is nearing the $59 level after an extended bounce off $50, mirroring a pattern that preceded negative price action roughly a month ago. However, this rally also used the steadily ascending 320-day moving average as a jumping-off point. The upcoming earnings report could either provide the momentum needed, or send WFC back towards that line of support.
