Wells Fargo & Company beat first quarter earnings estimates by five cents on Friday morning, while revenues fell 1.4% year over year, matching modest expectations. The news triggered a minor pre-market uptick, lifting the troubled banking giant to a weekly high, and could attract more buyers during the regular session. However, it is unwise to expect the bounce to lift the stock out of its self-inflicted doldrums and into a new uptrend.
Wells Fargo has underperformed its rivals since 2016, when a sales scandal shocked long-term shareholders, triggering massive fines, firings and a Congressional inquiry. The Federal Reserve took unprecedented action against the bank in February 2018, advising that Wells Fargo can’t grow assets until undertaking major reforms. That decree is expected to cost the bank more than $400 million in lost 2018 revenues. (See also: How Wells Fargo Became One of the Biggest Banks in America.)
Wells Fargo stock ticked higher after a mixed first quarter earnings report but is unlikely to enter a new uptrend. …read more
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