Wells Fargo & Company (WFC) said on Tuesday that it had agreed to sell 52 retail bank branches to a subsidiary of Flagstar Bancorp, Inc. – Flagstar Bank (FSB).
Wells Fargo shares closed lower for the fourth time in the past eleven trading sessions in New York on Tuesday. The stock went down 0.60% ($0.33) to $54.50, after touching an intraday low at $54.29, or a price level not seen since June 1st ($54.27).
Shares of Wells Fargo & Company have retreated 10.17% so far in 2018 compared with a 2.81% gain for the underlying index, S&P 500 (SPX).
In 2017, Wells Fargo’s stock surged 10.09%, thus, it again underperformed the S&P 500, which registered a 19.42% return.
The sale encompasses all of the banks branches located in Michigan, Indiana and Ohio, as well as a small number of Wells Fargo branches in Wisconsin. About 490 employees will be affected, with all of them being expected to receive employment offers from Flagstar Bank.
Wells Fargo has already announced plans to cut the number of its retail bank branches to about 5 000 by the end of 2020, via divestitures and consolidations.
“We are very pleased to reach this agreement with Flagstar, as they are committed to providing excellent service to our customers and providing a great workplace for our team members”, Mary Mack, head of Community Banking and Consumer Lending at Wells Fargo, was quoted as saying in the companys press release.
“As we continue to reduce our branch network, we believe this sale to Flagstar will result in the best outcome for customers, team members and other stakeholders in these markets.”
The transaction comprises about $2.3 billion in deposits and is to be completed during this years final quarter, Wells Fargo said.
The transaction is also expected to boost Flagstar Banks liquidity, which will enable it to repay short-term Federal Home Loan Bank advances, Flagstar said.
According to CNN Money, the 30 analysts, offering 12-month forecasts regarding Wells Fargo’s stock price, have a median target of $62.00 with a high estimate of $75.00 and a low estimate of $45.00. The median estimate is a 13.76% surge compared to the closing price of $54.50 on June 5th.
The same media also reported that 13 out of 32 surveyed investment analysts had rated Wells Fargo’s stock as “Buy”, while 12 – as “Hold”. On the other hand, 5 analysts had recommended selling the stock.
Daily and Weekly Pivot Levels
With the help of the Camarilla calculation method, todays levels of importance for the Wells Fargo stock are presented as follows:
R1 – $54.56
R2 – $54.62
R3 (Range Resistance – Sell) – $54.68
R4 (Long Breakout) – $54.85
R5 (Breakout Target 1) – $55.06
R6 (Breakout Target 2) – $55.14
S1 – $54.44
S2 – $54.38
S3 (Range Support – Buy) – $54.32
S4 (Short Breakout) – $54.15
S5 (Breakout Target 1) – $53.94
S6 (Breakout Target 2) – $53.86
By using the traditional method of calculation, the weekly levels of importance for Wells Fargo & Company (WFC) are presented as follows:
Central Pivot Point – $54.12
R1 – $55.59
R2 – $56.50
R3 – $57.97
R4 – $59.45
S1 – $53.21
S2 – $51.74
S3 – $50.83
S4 – $49.93