Using the industry peer median P/E multiple (trailing + forward), Wells Fargo & Company (WFC) has a fair value of $82.19 based on 3 comparable companies in the Banks - Diversified industry.
USD in millions except Fair Price. Subject company highlighted.
| Mkt Cap ($M) | Trailing P/E | Forward P/E | |
|---|---|---|---|
| Wells Fargo & CompanyWFC | 254,947 | 12.5x | 14.9x |
| JPMorgan Chase & Co.JPM | 788,612 | 14.6x | 15.7x |
| Bank of America CorporationBAC | 353,404 | 12.7x | 12.7x |
| Citigroup Inc.C | 196,938 | 16.1x | 10.9x |
| Industry Median | 14.6x | 12.7x | |
| (*) Profit after tax | 21,338 | 17,160 | |
| Equity Value | 311,184 | 217,687 | |
| (/) Outstanding shares | 3,217 | 3,217 | |
| Fair Price | $97 | $68 | |
This P/E relative valuation uses the industry peer median Price-to-Earnings ratio to estimate fair value. Both trailing (last 12 months) and forward (next fiscal year analyst estimates) P/E multiples are computed independently.
The industry median trailing P/E is applied to the company's TTM net income, and the forward P/E to analyst-estimated net income. Each produces an equity value divided by shares outstanding to yield a fair price per share. The selected fair value is the average of the trailing and forward legs.