Wells Fargo (WFC) Stock Higher, New President Named
NEW YORK (TheStreet) -- Wells Fargo & Co. (WFC) - Get Report stock is up 0.75% to $55.37 in afternoon trading on Wednesday after the financial company announced that Timothy Sloan will become president and chief operating officer, effective immediately.
Sloan, who has been at Wells Fargo nearly three decades, will also maintain his role as head of wholesale banking and report to CEO John Stumpf.
"As we prepare for Wells Fargo's future, Tim is an ideal choice to lead one of the best teams in banking as they accelerate investments and drive change that position us for growth and enhance the many ways in which we help our customers succeed financially," Stumpf said in a statement.
Sloan is seen as the likely successor to Stumpf, who has been CEO since 2007, the Wall Street Journal reports.
According to the company's rules, 62-year-old Stumpf would have to retire by the end of the year he turns 65, unless an exception is approved by Wells Fargo's board, the Journal noted.
Separately, TheStreet Ratings team rates WELLS FARGO & CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
We rate WELLS FARGO & CO (WFC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, solid stock price performance, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- WFC's revenue growth has slightly outpaced the industry average of 1.2%. Since the same quarter one year prior, revenues slightly increased by 2.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- WELLS FARGO & CO's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WELLS FARGO & CO increased its bottom line by earning $4.10 versus $3.89 in the prior year. This year, the market expects an improvement in earnings ($4.15 versus $4.10).
- After a year of stock price fluctuations, the net result is that WFC's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- Net operating cash flow has increased to $18,937.00 million or 25.72% when compared to the same quarter last year. Despite an increase in cash flow of 25.72%, WELLS FARGO & CO is still growing at a significantly lower rate than the industry average of 311.90%.
- The gross profit margin for WELLS FARGO & CO is currently very high, coming in at 92.60%. Regardless of WFC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 25.35% trails the industry average.
- You can view the full analysis from the report here: WFC
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.