The company repurchased 27 million shares during the fourth quarter and said that a forward repurchase of another 6 million shares would settle during the first quarter.
Jefferies analyst Ken Usdin said in a report that although the market was focusing on the narrowing net interest margin, "we see flat net interest income as a decent result given huge deposit growth." However, the analyst added that "sustainability of mortgage banking will come into question given a 16% decline in its unclosed pipeline."
Usdin rates Wells Fargo a "Buy," with a $39 price target, and estimates the company will earn $3.55 a share during 2013, with EPS increasing to $3.65 in 2014.
Wells Fargo's fourth-quarter return on equity
- For Bank of America (BAC), the return on equity for the 12-month period ended Sept. 30 was 2.32%. The company's shares closed at $11.63 Friday, trading for 12 times the consensus 2013 earnings estimate of 97 cents, which is the highest forward price-to-earnings ratio among the big four. The consensus 2014 EPS estimate is $1.26. The company will announced its fourth-quarter results on Jan. 17, and on Monday said that earnings would be only ""modestly positive," as a result of its mortgage putback settlement with Fannie Mae (FNMA) and because of its participation in an $8.5 billion mortgage foreclosure settlement with federal regulators.
- For Citigroup (C), the operating ROE for 12 months through Sept. 30 was 3.98%. Citi's shares closed at $42.34 Friday, trading for 9.1 times the consensus 2013 EPS estimate of $4.67. The consensus 2014 EPS estimate is $5.16.
- JPMorgan's (JPM) operating ROE for the 12-month period ended Sept. 30 was 10.42%. The company's shares closed at $46.14 Friday, trading for 8.7 times the consensus 2013 EPS estimate of $5.31, which is the lowest forward P/E among the big four. The consensus 2014 EPS estimate is 2014. JPMorgan will announce its fourth-quarter results on Jan. 16.
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