Traders Purchase Large Volume of Call Options on Wells Fargo & Company (NYSE:WFC)

Key Points

• Wells Fargo saw unusually heavy call-option activity: Investors purchased 88,948 call options, about 103% above the average daily volume.
• WFC shares rose 2.3% to $82.08, while analysts maintained a generally favorable outlook with a consensus “Moderate Buy” rating and an average price target of $99.47.
• The bank recently exceeded quarterly earnings and revenue expectations and increased its quarterly dividend from $0.45 to $0.50, resulting in a 2.4% yield.

Wells Fargo & Company (NYSE:WFC) was the target of unusually large options trading on Thursday. Stock investors purchased 88,948 call options on the company. This represents an increase of approximately 103% compared to the average daily volume of 43,799 call options.

Wall Street Analyst Weigh In

Several analysts recently issued reports on WFC shares. Raymond James Financial reiterated a "market perform" rating on shares of Wells Fargo & Company in a research report on Tuesday, July 14th. Truist Financial upped their price target on Wells Fargo & Company from $94.00 to $95.00 and gave the stock a "buy" rating in a research note on Thursday, October 1st. Wall Street Zen raised shares of Wells Fargo & Company from a "sell" rating to a "hold" rating in a report on Sunday, June 14th. UBS Group reduced their price objective on shares of Wells Fargo & Company from $104.00 to $102.00 and set a "buy" rating on the stock in a research report on Monday. Finally, Bank of America upped their target price on shares of Wells Fargo & Company from $95.00 to $102.00 and gave the stock a "buy" rating in a research report on Tuesday, July 7th. Two equities research analysts have rated the stock with a Strong Buy rating, sixteen have issued a Buy rating and seven have given a Hold rating to the stock. According to MarketBeat, Wells Fargo & Company has a consensus rating of "Moderate Buy" and an average target price of $99.47.

Wells Fargo & Company Stock Up 2.3%

WFC traded up $1.82 on Thursday, hitting $82.08. The company had a trading volume of 13,119,208 shares, compared to its average volume of 15,939,268. The stock has a market capitalization of $248.23 billion, a price-to-earnings ratio of 11.93, a P/E/G ratio of 0.87 and a beta of 0.96. Wells Fargo & Company has a 12-month low of $72.78 and a 12-month high of $97.76. The company has a debt-to-equity ratio of 1.09, a quick ratio of 0.90 and a current ratio of 0.90. The stock has a fifty day moving average price of $85.95 and a 200-day moving average price of $83.15.

Wells Fargo & Company (NYSE:WFC - Get Free Report) last issued its quarterly earnings data on Tuesday, July 14th. The financial services provider reported $1.96 EPS for the quarter, beating the consensus estimate of $1.73 by $0.23. The firm had revenue of $22.62 billion during the quarter, compared to analyst estimates of $21.86 billion. Wells Fargo & Company had a return on equity of 13.85% and a net margin of 17.55%.The business's revenue for the quarter was up 8.6% compared to the same quarter last year. During the same quarter in the prior year, the business posted $1.60 EPS. Analysts predict that Wells Fargo & Company will post 7.28 EPS for the current fiscal year.

Wells Fargo & Company Increases Dividend

The firm also recently declared a quarterly dividend, which was paid on Tuesday, September 1st. Shareholders of record on Friday, August 7th were issued a $0.50 dividend. The ex-dividend date of this dividend was Friday, August 7th. This is a positive change from Wells Fargo & Company's previous quarterly dividend of $0.45. This represents a $2.00 annualized dividend and a yield of 2.4%. Wells Fargo & Company's dividend payout ratio is currently 29.07%.

Trending Headlines about Wells Fargo & Company

Here are the key news stories impacting Wells Fargo & Company this week:

• Positive Sentiment: TD Cowen initiated coverage with a Buy rating and a $95 price target, implying substantial upside from recent trading levels. Morgan Stanley also recently upgraded WFC to Overweight and named it a top pick with a $102 target. TD Cowen Wells Fargo coverage
• Positive Sentiment: Wells Fargo is reportedly discussing a potential arrangement with Payward, the parent company of Kraken, to provide liquidity for crypto trading. Although no agreement has been confirmed, the initiative could broaden the bank’s digital-asset and wealth-management capabilities. Wells Fargo and Payward crypto liquidity discussions
• Positive Sentiment: WFC’s third-quarter earnings report is approaching, with analysts focused on revenue, net interest income, credit quality and other key operating metrics. A strong release could reinforce the stock’s valuation case after its recent reset. Wells Fargo third-quarter earnings preview
• Neutral Sentiment: Rising Treasury yields are creating competing effects for banks. Higher rates can support asset yields, but a rapid increase may pressure bond portfolios, funding costs and loan demand. The impact on WFC will depend on the pace and direction of rates. Banks under pressure from spiking yields
• Negative Sentiment: The Department of Housing and Urban Development plans to investigate Wells Fargo’s fair-lending compliance, including allegations that programs designed to increase Black and minority homeownership favored certain borrowers. The probe raises potential legal, regulatory, reputational and financial risks, reversing some of the optimism surrounding the bank’s progress with regulators. Wells Fargo HUD lending probe

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently made changes to their positions in the business. Artemis Investment Management LLP raised its holdings in shares of Wells Fargo & Company by 33.6% during the third quarter. Artemis Investment Management LLP now owns 127,539 shares of the financial services provider's stock valued at $10,209,000 after acquiring an additional 32,050 shares during the last quarter. YHB Investment Advisors Inc. increased its position in shares of Wells Fargo & Company by 1.8% during the third quarter. YHB Investment Advisors Inc. now owns 26,045 shares of the financial services provider's stock worth $2,085,000 after purchasing an additional 460 shares in the last quarter. Titleist Asset Management LLC increased its position in shares of Wells Fargo & Company by 8.5% during the third quarter. Titleist Asset Management LLC now owns 5,918 shares of the financial services provider's stock worth $474,000 after purchasing an additional 462 shares in the last quarter. Everhart Financial Group Inc. raised its stake in Wells Fargo & Company by 3.5% in the 3rd quarter. Everhart Financial Group Inc. now owns 23,996 shares of the financial services provider's stock valued at $1,921,000 after purchasing an additional 816 shares during the last quarter. Finally, Gradient Investments LLC lifted its holdings in Wells Fargo & Company by 19.2% in the 3rd quarter. Gradient Investments LLC now owns 214,893 shares of the financial services provider's stock valued at $17,202,000 after purchasing an additional 34,560 shares in the last quarter. Hedge funds and other institutional investors own 75.90% of the company's stock.

Wells Fargo & Company Company Profile

Wells Fargo & Company NYSE: WFC is a diversified financial services company that provides banking, lending, investment, and wealth management services to individuals, businesses, institutions, and government entities. Its offerings include checking and savings accounts, credit cards, personal and commercial loans, mortgages, payment services, and other deposit and credit products.

The company also provides investment banking, capital markets, brokerage, advisory, asset management, and retirement services through its corporate and investment banking and wealth and investment management businesses.

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