Why Wells Fargo Stock Gained 15% Last Month

By The Motley Fool4 days ago

What happened

Shares of Wells Fargo (NYSE: WFC) moved higher last month after the nation's No. 4 bank by assets posted a strong first-quarter earnings report, and continued to rebound on broader hopes for the economic recovery.

According to data from S&P Global Market Intelligence, the stock finished the month up 15%. As you can see from the chart below, most of the gains came in the middle of the month when Wells Fargo's earnings report came out:

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Data by YCharts.

So what

Wells Fargo stock tracked with the S&P 500 for most of the first half of the month, as it benefited from increasing optimism for the economic reopening, and as it got some bullish analyst notes.

Shares rose 5.5% on April 14 when the company reported fourth-quarter earnings, and continued to rise from there. Wells Fargo handily beat estimates with revenue rising 2% to $18.1 billion, ahead of expectations for $17.5 billion. On the bottom line, earnings per share jumped from just a penny in the quarter a year ago, as its performance was deeply impacted by the pandemic, to $1.05, easily beating estimates of $0.70. The bank benefited from releasing $1.6 billion in loan loss reserves, showing that the impact of the pandemic wasn't as bad as expected.

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