Wells Fargo (WFC) Earnings Push Stock Toward All-Time High

By Jeffrey Moraes and John Darsie, The Daily Reckoning Jul 12, 2013, 5:21 PM 

Wells Fargo & Company (NYSE:WFC) topped consensus estimates on EPS and revenues in its earning report Friday before the opening bell. Shares of WFC are so far are up 1.77% on the day.

EPS Results

Actual $0.98 vs. Expected $0.93
Increase year-to-year: 19.51% from 0.82%

Revenue Results

Actual $21.4B vs. Expected $21.22B
Decrease year-to-year: -5.33%
Revenue decreased 4.51% from $22.41 billion in the previous quarter

Guidance

EPS Q3 2013: Actual $0.93 vs. Expected $0.93 UNCHANGED
EPS in current fiscal year: Actual $3.72 vs. Expected $3.65

Key Takeaways from Conference Call

CEO John Stumpf: “Our results reflected the strength of our diversified business model. Compared with the prior quarter, we grew loans, deposits, and net interest income, and both our efficiency ratio and credit quality improved. Wells Fargo again demonstrated an ability to grow during a dynamic economic and interest rate environment, and we feel very well positioned to continue to perform for our shareholders over the long term.”

Taking a Look at the Chart

Pattern: Uptrend

Wells Fargo is showing extreme relative strength in the financial sector, making new all-time closing highs again this week while most banks are well off previous highs. The stock has been in a steady uptrend since the market bottom in March 2009, and even showed considerable relative strength during the financial crisis. After hitting it’s 52 week low on November 14th of last year, the bank entered a new short-term uptrend and continues to make higher highs and higher lows. After pulling off slightly in the two days leading up to this morning report, the bank hit a 52 week high early today before pulling off slightly. The only resistance level remaining is the all-time intraday high of $43.08 from September 2008.

(click to enlarge)

Potential Sympathy Trades – Stocks in the Same Sector

  • Bank of America Corp. (NYSE:BAC)
  • CitiGroup, Inc (NYSE:C)
  • JPMorgan Chase & Co. (NYSE:JPM)
  • UBS AG (NYSE:UBS)
  • Credit Suisse Group AG (CS)

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