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Analysis of Wells Fargo, a banking company providing services in the United States and Canada.

Analysis of Wells Fargo, a banking company providing services in the United States and Canada.

6 January 2021

Wells Fargo is a banking company providing services in the USA and Canada. The main business of the company is the banking business, which last year accounted for more than 80% of the company’s assets. Wells Fargo differs from banks such as Goldman Sachs and Morgan Stanley because the company’s investment business is less developed. The main competitors of the company are J.P. Morgan, Citibank and American express, whose business focuses more on the retail sector.

TTM Revenue: $ 74.2B (-12.3% YoY)

Net Income: $ 3.2B (-83% YoY)

Earnings per share last quarter: $ 0.42, below the $ 0.45 forecast

The company’s business was severely damaged. This is mainly due to the decrease in the interest rate.

Distribution of revenue by business segment:

Community Banking – 50.16%

Wholesale Banking – 30.64%

Wealth and Investment Management – 19.20%

EPS forecast for the current quarter: $ 0.6

The company’s financial performance deteriorated significantly during the crisis. The main factor was the decrease in the interest rate by the Federal Reserve System. Since the company’s profits mainly came from payments of interest on loans, and the rates went down.

Thus, while rates remain low, the company’s business will be much less profitable than a year ago. However, the company remains fundamentally strong. Many analysts say that the company’s stock quotes may return to pre-crisis levels (double in size) in 1-2 years.

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