Will Wells Fargo & Co (WFC) Continue to Lead and Deliver Strong Loan Growth?

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Wells Fargo & Co (NYSE:WFC) is planning to disclose its first quarter numbers on April 14 before market open. In the last three quarters, the company’s earnings came in line with the Street analysts’ expectations. Will it change the trend to provide a positive surprise this time? There does not appear to be any major negatives to impact its results in the March quarter. Therefore, there is every possibility that the company might either continue to report in line or above the consensus earnings.

Key Factors

There are few favorable trends for Wells Fargo & Co (NYSE:WFC) in the 4th quarter that investors hope to maintain. The company grew both revenue and pretax, pre-provision profit in the 4th quarter of 2014 and had strong broad-based loan growth. Investors will keep an eye on Loan Growth.  Investors will hope to see growth in the company’s deposit base and customer base. In the 4th quarter of 2014, deposits rose 8% to $89 billion and primary consumer checking customers increased by 5.2 percent.

The financial services provider has been successful in increasing consumer, as well as, commercial and at the same time maintains its risk level apart from price discipline. In the past, its revenue grew mainly because of loan growth since interest rate remained soft for a long time. In the fourth quarter, its quarter-end loans grew 5% to $862.6 billion whereas quarter-end core loans advanced 8%. Similarly, its credit quality came in to play as its net charge-offs slipped $228 million. Therefore, interest income is expected to witness continued growth.

Expectations

Wells Fargo & Co (NYSE:WFC) indicated even during the fourth quarter results announcement that it was confident of its diversified business model continue to gain in the current year also.

Wall Street analysts predict the financial services provider to earnings of 98 cents a share and revenue of $21.24 billion for the March quarter. Analysts’ have revised down their earnings expectations from 99 cents a share more than two months back. Recently, there was no revision in earnings predictions.

Wells Fargo & Co (NYSE:WFC) is considered to be one of the conservative and best run banks in the United States and that was the main reason why it could continue to meet or beat the Street analysts’ predictions.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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