Wells Fargo shares fall the most in one week on Friday, bank’s workforce to be reduced by 5% to 10% in three years

Wells Fargo & Company (WFC) revealed last week plans to reduce its workforce by 5% to 10% in the upcoming three years in relation with a turnaround effort. According to Wells Fargo, the latest job cuts were to reflect displacements and normal team-member attrition.

Wells Fargo shares closed lower for the sixth time in the past ten trading sessions in New York on Friday. It has also been the steepest daily loss since September 13th. The stock went down 1.01% ($0.56) to $54.99, with the intraday high and the intraday low being at $55.81 and $54.92 respectively.

Shares of Wells Fargo & Company have retreated 9.36% so far in 2018 compared with a 9.58% 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.

Wells Fargo did not point out which departments or regions would be affected by the job cuts. On the other hand, the bank noted that the reductions would be made, because of changing consumer preferences since an increasing number of clients use self-service technology to perform everyday banking operations.

The reductions are expected to enable the Wall Street bank to achieve its objective of cutting costs by as much as $4 billion by the year 2020. Wells Fargo has already announced plans to reduce the number of its branches by 800 by 2020 as well as to sell non-core businesses in order to cut costs and increase its efficiency.

“Employee related costs are the largest expense so that was likely where the cuts were coming,” Keefe Bruyette & Woods analyst Brian Kleinhanzl was quoted as saying by Reuters. “Automation also lowers the need for staffing over time.”

As of June 30th, about 264 500 people were employed with Wells Fargo, the same media reported.

According to CNN Money, the 28 analysts, offering 12-month forecasts regarding Wells Fargo’s stock price, have a median target of $63.00 with a high estimate of $70.00 and a low estimate of $50.00. The median estimate represents a 14.57% upside compared to the closing price of $54.99 on September 21st.

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, 4 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 – $55.07
R2 – $55.15
R3 (Range Resistance – Sell) – $55.23
R4 (Long Breakout) – $55.48
R5 (Breakout Target 1) – $55.77
R6 (Breakout Target 2) – $55.88

S1 – $54.91
S2 – $54.83
S3 (Range Support – Buy) – $54.75
S4 (Short Breakout) – $54.50
S5 (Breakout Target 1) – $54.21
S6 (Breakout Target 2) – $54.10

By using the traditional method of calculation, the weekly levels of importance for Wells Fargo & Company (WFC) are presented as follows:

Central Pivot Point – $54.91
R1 – $55.89
R2 – $56.78
R3 – $57.76
R4 – $58.73

S1 – $54.02
S2 – $53.04
S3 – $52.15
S4 – $51.25